UK | UKHospitality has reiterated its support cost effective operations to prevent closures and capitalise on growth opportunities.
The cost of operating a business in the UK hospitality sector has now reached extraordinary highs, according to UKHospitality.
The latest Hospitality Market Monitor from CGA by NIQ and AlixPartners showed that closures in Britain’s hospitality sector slowed from eight sites a day in 2023 to four a day in the first quarter of 2024. The number of food-led sites grew by 0.1 percent in the first quarter of 2024, and that casual dining and independent restaurants grew by o.5 percent.
“Four hospitality venues closing a day is still four too many. These closures rob communities of all the benefits hospitality serves up for Britain – the crucial job opportunities, local economic growth and hubs for communities," said UKHospitality chief executive.
“However, this data gives some signs to suggest the sector is beginning to recover. A slight growth in both casual dining and independent restaurants indicates a potential growth in an appetite for investment in the sector."
Nicholls added that while nascent, these were positive signals, albeit at a time when the sector continues to face tough economic challenges, which continue to put at risk the many benefits hospitality delivers to Britain.
“The closure rate may have halved, but we’re still losing venues and that is not acceptable. It remains the case that the cost burden for the sector is too high, and we need to see those costs rebalanced and reduced, if we are to build on some of the growth we are seeing.”
UKHospitality also said the Bank of England’s decision to hold interest rates again has continued to force businesses to divert money away from investment into paying the bills. Seven of the Bank’s Monetary Policy Committee, which oversees interest rates, voted to hold the rate at 5.5 percent. Two members voted for it to be cut.
“Many hospitality businesses are still struggling with Covid-related loans repayments due to persistently high interest rates, and it continues to suck money away from investment and business growth."
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