Nearly 300 hospitality businesses write to government calling for support

Nearly 300 UK hospitality businesses have signed an open letter to the government warning the industry will not survive without support to deal with rising costs.

Marriott International, Mitchells & Butlers, Pizza Hut UK, Caffè Nero, and Merlin Entertainments are among the signatories, alongside dozens of smaller pubs, bars, restaurants and hotels in England, Scotland, and Wales.

Prime minister Liz Truss is to set out plans to limit energy bill rises for both households and businesses this morning.

It comes after new figures from trade body UKHospitality showed that three in five operators are no longer profitable due to rising costs.

The average energy price increase for the hospitality sector is 238%, with more than 70% of businesses seeing bills more than double, and nearly 30% hit with rises of over 300%, the study found.

Rising costs are expected to lead to a 15% drop in staff numbers, equivalent to 383,000 jobs across the UK, according to the survey.

Three-quarters of hospitality businesses are being forced to hike prices, more than six in 10 are reducing staff hours, four in 10 are reducing headcount, and half are cutting trading hours.

The letter proposes a five-point plan of action through to April 2023, with a review in early 2023. The measures include:

1. A 10% headline VAT rate for hospitality
2. A business rates holiday for all hospitality premises, with no caps applied
3. Deferral of all environmental levies
4. Reinstatement of a generous HMRC Time to Pay scheme
5. Reintroduction of a trade credit insurance scheme for energy

Kate Nicholls, chief executive of UKHospitality, said: “The hospitality sector is critical to our national economic and social recovery and with support will be well placed to drive growth, generate jobs and invest in local communities. To achieve this however, the new Government needs to act quickly to address the soaring energy costs that are strangling the sector.

“We are encouraged by talk of energy price freezes for families and businesses but this won’t be enough to save hundreds of businesses and thousands of jobs in the sector. The package of five measures we are asking for will help us guarantee jobs and wages, to ensure that businesses stay afloat, and to preserve and grow our communities across the UK.”

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