Hospitality operating at 85% capacity, UKH finds

Almost 70% of businesses are operating at less than 85% of capacity according to a new survey from members of the British Institute of Innkeeping (BII), the British Beer and Pub Association (BBPA), UKHospitality and Hospitality Ulster.

According to the poll, tax rises have forced businesses to dramatically cut their workforce. Moreover, 73% of respondents have less than six months of cash reserves, with one in five having no cash reserves at all.

As a direct result of April cost increases, 79% have increased prices and more than half have cut staff numbers.

These numbers come as 84,000 hospitality jobs have been lost since the Budget, which imposed an additional annual cost of £3.4bn on the sector.

As a result, the trade bodies have called for a reduction in VAT, an amendment to April’s changes to employer NICs and delivery of lower business rates for the sector.

In a joint statement, the trade bodies said: “This shocking data reinforces the urgent need for the Government to recognise the incredible pressure hospitality businesses have been under, particularly since April, and illustrates why it should come forward with measures to support this vital sector at the budget.

“Unsustainable tax increases are squeezing businesses, stifling growth and investment, and threatening local employment, especially for young people. It is forcing businesses across the sector to make impossible decisions to cut jobs, put up prices, reduce opening hours and sadly limit the support they desperately want to give their communities.”

The statement added: “Hospitality is united in which measures will reverse this trend and drive growth: a reduction in VAT for hospitality, changes to employer NICs and permanently lower business rates for the sector. Now is the time to act and back a vital British sector that supports the economy, jobs, and local communities. We urge the Government to do so at the budget this autumn.”