Confidence among independent restaurateurs and hoteliers is plummeting as concerns over faltering consumer spending grow.
The latest quarterly survey by the Small Business Research Trust (SBRT) found 38% of hotels and restaurants expected tumbling sales over the next six months - higher than in any other sector.
And 42% of hotels and restaurants expect to make staff cuts, compared with 10% of wholesalers and retailers.
A SBRT spokesman said: "We were surprised by the findings as many commentators have been predicting a bumper year for hotels."
However this classification includes restaurants, which with the current tight consumer spending, are always one of the first business areas to go."