Only 34% of Britain’s hospitality leaders feel confident about their business prospects over the next year, according to CGA by NIQ and Sona’s latest Business Confidence Survey. Confidence in the hospitality sector overall is even lower at just 15%.
Rising costs have severely impacted the industry, particularly National Insurance and minimum wage increases from April. Four in five leaders report significantly higher wage bills than last year, while 91% cite increased employment costs as a major concern. Additional pressures include rising business rates (73% concerned) and food and drink inflation (61% concerned).
The financial strain is evident in cash flow, nearly 60% of leaders have fewer than six months of reserves, with one in ten considering their business at risk of failure within 12 months. To manage costs, 65% have reduced staff or cut hours, 40% have deferred pay increases, and 29% have reduced spending on employee benefits and training.
Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “It is particularly frustrating that so many of the increases in employers’ outgoings, from labour bills to taxes to inflation to compliance with legislation are out of their control. These costs are choking hospitality businesses and compromising the investment and employment that are so important to the UK economy. The longer term outlook for the sector remains good, but it deserves much better support than it is currently getting.”
Paul Watson, Sona’s VP of Hospitality, said: “The hospitality industry is continuing to endure a storm of economic challenges, stifling growth and draining productivity. From a labour standpoint, now more than ever, ensuring that every rota and schedule is fully optimised is incredibly important. Having the right digital solutions in place is a game changer, it supercharges decision-making and ensures businesses are operating at peak efficiency, 100% of the time.
“Now isn’t the time to weather the storm, it’s the time to empower businesses to operate as efficiently as possible in order to help them trade their way out of trouble.”
