Cash Flow Crisis in Hospitality: 3 in 10 Businesses Out of Reserves

A record 29% of hospitality businesses now report having no cash reserves left, according to new findings from UKHospitality, the British Institute of Innkeeping, the British Beer & Pub Association, and Hospitality Ulster. As the Chancellor prepares to deliver the Budget, trade bodies are warning that “urgent action” is needed to prevent further closures.

What’s happening?

• 73% of businesses have less than six months’ worth of reserves.
• 58% say they’ll be forced to cut staff or raise prices if the Budget doesn’t include support.
• Half have already made staff cuts.
• On average, staff hours have dropped by 8% since last year.

Since April, when £3.4 billion in extra annual costs hit the sector, 70% of businesses have already raised their prices by an average of 5%.

What’s the ask?

Trade bodies are urging the government to consider:

• A cut to VAT
• Changes to employers’ National Insurance
• A maximum business rates discount

Without these, the situation could worsen dramatically.

“The pressure on local shops and venues is becoming unbearable,” said a joint statement from the associations. “Businesses are making tough decisions to survive, and many have already shut their doors. For those still open, cash flow is reaching crisis point.”