Hospitality businesses across the UK are being battered by a perfect storm from a financial management perspective and many are struggling to stay afloat.
That’s according to a new report put together by a group of industry trade bodies, which suggests that only one in three hospitality operators can currently consider themselves profitable.
Rising costs associated with energy bills, essential goods and labour supplies are all cited as key reasons why the finances of cafes, pubs, bars and restaurants are being squeezed to such a significant extent.
Hospitality operators suffered massively during the pandemic and the associated lockdowns but there was optimism that the industry would be well placed to recover once the worst of the Covid crisis could be left behind.
However, while they are now able to open essentially as they did prior to the pandemic, rising costs mean that many thousands of businesses in the sector are still struggling to remain viable and avoid insolvency.
Research into the key issues impacting hospitality firms was conducted recently on behalf of UK Hospitality, the British Beer and Pub Association and the British Institute of Innkeeping.
Statements given on behalf of all three organisations explained that the industry is yet to truly get back on its feet in the wake of the pandemic and insisted that government support is needed to help make sure a full recovery can happen.
“In the past few weeks inflation has hit record levels and costs on key ingredients and utilities has rocketed, whilst consumer confidence has plummeted resulting in fewer customers in our venues,” remarks from the three organisations explained.
“We are weathering a perfect storm, but we can’t hold on forever, we need relief as soon as possible before the cost of doing business forces venues to close for good.”
According to the recent research looking into these issues, only around 28 per cent of hospitality businesses have been able to invest for the future because their operating environment is so tough.
The recent polling also found that the swiftly rising costs associated with energy bills is among the biggest challenges that hospitality firms are currently facing.