Confidence among Britain's hospitality sector leaders is dwindling, with only a third feeling optimistic about the forthcoming year's trading amid escalating costs.
This troubling trend marks the fifth consecutive month of declining confidence in the industry, as reported by CGA by NIQ's most recent Business Confidence Survey, as reported by .
Morale has now plummeted to its bleakest point since late 2022 and stands as the second lowest since the Covid lockdowns of 2020.
Michael Kill, the head of the Night Time Industries Association (NTIA), has openly expressed that the current climate is "more concerning than anything we saw during the pandemic".
Adding to this concern is the reality that profitability has been significantly undermined by rapidly increasing labour expenses, with an overwhelming 99 per cent of enterprises acknowledging a rise in their wage bills over the previous year.
Despite many in the hospitality sector experiencing robust trade over Christmas, merely a third of businesses have reported a profit uptick during this interval.
The situation is expected to become more strenuous from April when employers will be hit with additional labour costs.
Insights from º£½ÇÊÓƵHospitality indicate that changes to national insurance contributions (NICs) are anticipated to inflate the cost of employing an average worker by £2,500.
Earlier in the week, it emerged that a third of º£½ÇÊÓƵ hospitality companies might have to downsize their workforce due to increased taxation.
Alarming figures from º£½ÇÊÓƵHospitality suggest that one in ten may need to shutter at least one establishment, while just shy of two thirds are set to withdraw investment plans.
"Pubs, brewers and hospitality venues will be forced to make painful decisions to weather these new costs, which will have damaging impacts on businesses, jobs and communities," warned the º£½ÇÊÓƵ's three core hospitality trade associations – º£½ÇÊÓƵHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and Hospitality Ulster – in a joint statement.
Recently, City broker Peel Hunt raised alarms about the future of British pub culture, stressing that structural pressures and tax increases are putting it at risk.
Hospitality was noted as the primary contributor to economic growth in November and December; however, according to Peel Hunt, tax rises announced in the October budget "halted and reversed a year-long upgrade cycle".
Both hospitality and retail sectors have been appealing to the Government for a phased introduction of changes to employer's national insurance (NICs), and earlier this year, Baroness Noakes introduced a related bill.
The legislation, also supported by M&S chief Lord Wolfson, is currently at the committee stage in the House of Lords, though analysts have expressed doubts over its potential to be enacted.
