Rise in hospitality businesses closing for the winter due to costs crisis

As temperatures drop, heating systems begin clunking into action and the cost-of-living crisis leaves seats empty, more hospitality operators are taking the decision to put their businesses into hibernation this winter.

Si Toft, chef owner of the one-AA-rosette Dining Room in Abersoch, shuttered his restaurant last weekend. He told The Caterer: “We’ve been putting it off and putting it off. I have a bit of a bee in my bonnet about places closing in the winter.

“We’re in a very seasonal area, and I personally think you take the rough with the smooth and if you take the money in the summer, you owe it to the community and your staff to stay open all year so it’s not sitting very well with me, but it is what it is.

“We run at a loss every winter and I have a figure which over the years we’ve learnt we have to have in the bank end of September to see us through until February. But the increases in food and electric mean that figure is now an unknown.

“So, we’ve found that if we effectively mothball the place now there’s enough in the bank to cover the fixed costs, the rent and one or two other things. Because [the restaurant is] so small it’s only me and I can do that.

“The main thing is if I don’t pull the plug, I’ll get to the point where there isn’t the money to restock in February/March when hopefully there’s a slightly more guaranteed income, when prices might have settled down a bit more and when I won’t have to have the heating on.”

Michael Caines is also to close his Harbourside Refuge restaurant and bar in Porthleven, Cornwall for the winter in the face of soaring costs. The chef launched the venue in summer 2020 after purchasing the site from the Rick Stein restaurant group.

He said: “With a heavy heart that we have chosen to close Harbourside Refuge this winter and for the foreseeable future as we feel that the business is not sustainable to survive through the winter months to come."

Caines said he hoped that closing through the winter would allow the restaurant to “weather the economic storm” and reopen in 2023.

On the Suffolk coast Nathan Jones – co-founder of contract caterer Harbour & Jones which merged with CH&Co in 2014 - and his wife Sally, announced they would be closing their 14-bedroom boutique hotel the Hog through the winter months. The couple invested more than £1m in 2019 to open the property but said trading conditions now meant they were facing a loss.

Nathan said: “Having done the mathematics we would just become busy fools at the expense of supporting employment of staff, paying the government its taxes, lining the utility companies' pockets with these excessive charges whilst trying to support our suppliers. There is nothing in this for us except projected losses, so I am not prepared to continue.”

He added: “[We] will reconsider our position and options on the modelling of the property in due course."

At the Hog, energy costs would have increased by 245% until the end of March 2023, even with the government’s six-month ‘price cap’ in place.

The government has yet to detail any package of ongoing support beyond the end of March 2023, which could see the hotel’s costs hit a 300% increase.

The Q4 Hospitality Members' Survey conducted by UKHospitality, the British Beer and Pub Association (BBPA), the British institute of Innkeeping (BII) and Hospitality Ulster revealed that 35% of operators expect to trade at a loss by the end of the year. More than three-quarters of operators (77%) said they had seen a reduction in people eating and drinking out.

For some, the prospects for 2023 are not enough to continue. Crockers Henley, Hostmore’s 63+1st restaurant and cocktail bar in Harrogate and two of chef-restaurateur Larkin Cen’s Woky Ko sites in Bristol are to all cease trading permanently due to the challenging trading conditions.