A recent joint survey by UKHospitality, the British Beer & Pub Association, the British Institute of Innkeeping, and Hospitality Ulster reported that 25% hospitality businesses have zero cash reserves with a further 29% having less than three months’ cover.
The research uncovered the widespread challenges faced by operators across the industry, with 98% reporting increases in food and drink, 96% with rises in wages and 98% expressing concern over the impending national living wage increase in April. Additionally, 85% noted the increase in energy costs.
These escalating costs have led to a diminishing optimism among business owners, with almost two-thirds (64%) expressing concern for the next 12 months —a 6% increase compared to October 2023.
Respondents voiced their key priorities for action in the upcoming Budget. Notably, 94% advocated for a reduction in the VAT rate, while 80% called for a lower business rates multiplier specific to the hospitality sector, and 71% emphasised the need for a comprehensive business rates reform.
Trade bodies responded: “These results clearly show the perilous state our pubs, restaurants, hotels and cafes find themselves in. The fact that a quarter have run out of cash reserves is a real cause for concern. Those businesses are extremely vulnerable to the slightest shock forcing them to shut their doors for good. We’ve already seen too many good businesses shut up shop and that has left cities, towns and villages without a vital community asset. These businesses need urgent support. Hospitality is the foundation of the everyday economy and absolutely vital in the services they provide. Measures to help the sector won’t just keep businesses afloat, but it will inevitably lead to further investment from the sector, which has a proven track record of driving economic growth, creating jobs and creating fulfilling careers. It’s clear that practically no business has been immune to the relentless price increases that have plagued the sector and can absorb costs no longer, with many already forced to pass these on to customers.”
Real-time cost monitoring has never been so important in such fast moving markets. Amidst escalating costs across all operational fronts, businesses must prioritise monitoring and understanding in order to make the right data-driven decisions.
OmniPATH
OmniPATH embodies the end to end cost monitoring and payables process, enabling businesses with early visibility across every cost category. Our sophisticated AI meticulously analyses bills and invoices to identify pricing errors and discrepancies, whilst scrutinising supplier details for signs of suspicious activity. Not only does OmniPATH analyse and alert but it also helps businesses reduce costs across accounts payable, automating manual tasks whilst streamlining productivity.
If you’d like to know more about how OmniPATH can support Operators with analysis and Finance with automation then get in touch for more information.
