One-Third of UK Hospitality Businesses Risk Going Bust by Next Year

Graffiti covered closed down pub The Fox in Haggerston on 19th May 2022 in London, United
Mike Kemp/In Pictures via Getty Images
Peter Caddle

Over a third of hospitality sector businesses in Britain face closure by next year, a group of industry associations has claimed.

Research conducted by industry groups UKHospitality, the British Beer and Pub Association (BBPA), the British Institute of Innkeeping (BII) and Hospitality Ulster, has indicated that over one-third of businesses in the sector risk closure by 2023.

It comes as companies across Europe face massive cost spikes and a reduction in customers, with various organisations throughout the continent warning that mass closures and even permanent deindustrialization of the continent may lay ahead.

According to a survey by the hospitality grou[s, 35 per cent of UK businesses in the sector face either operating at a loss or becoming completely financially unviable during the last quarter of this year, with the vast majority of companies expecting their financial situation to only get worse with time.

To make matters worse, just under nine in ten of businesses polled believe support being provided by the UK government will be enough to protect the hospitality industry over the next six months.

“The results clearly lay out the stark situation facing hospitality businesses, with many on the brink due to the cost of doing business crisis,” a joint statement issued by the industry groups reads.

“The vulnerability of the sector due to soaring energy costs, crippling rises in the cost of goods and dampening consumer confidence is on full display in this survey and if urgent action isn’t taken, it is looking incredibly likely that we will lose a significant chunk of Britain’s iconic hospitality sector in the coming weeks and months,” it continued.

As the cost of living crisis rages on, it appears that UK businesses are so far facing the brunt of existential problems, with many companies in the country even unable to source energy suppliers due to fears that any gas or electricity contracts risk going unpaid once enterprises start going under.

Such struggles in Britain mirror current affairs on the European continent, with one business organisation in Germany recently warning that the private sector has already been pushed to the brink, and that demands from the country’s government for them to cut gas usage simply cannot be met.

“The companies’ struggle to survive in the face of skyrocketing energy prices has meant that the short-term operational potential has been exhausted,” Peter Adrian, the President of the Association of German Chambers of Commerce and Industry, said regarding the situation last week.

Adrian went on to say that any savings seen by the sector will be the result of companies either downsizing their operations or going under, a claim that echoes a previous statement by one manufacturers’ association that Europe was now facing permanent deindustrialization as a result of the energy crisis.

Such problems are only one issue for European lawmakers to contend with however, with there having now been repeated warnings regarding the threat of civil unrest across the continent should people be unable to properly heat or power their homes.

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