Pubs and restaurants have suffered a collapse in Christmas party bookings due to the UK rail strikes next week.
Industry chiefs suggest the drop is as bad as last year when cases of the Omicron variant of covid-19, which hit hotel companies in the run-up to last Christmas, were rising.
Kate Nicholls, chief executive of trade body UKHospitality, said companies were reporting cancellation rates of up to 30%, which could create a £1.5bn black hole in revenue.
The RMT union is on strike on December 13 and 14 [next Tuesday and Wednesday] and December 16-17 [Friday and Saturday], and from 6:00 p.m. on Christmas Eve to 7:00 a.m. on December 27. Network Rail has advised passengers to ‘only travel if necessary’ on those dates.
“We are entering omicron territory,” Nicholls told Bloomberg, adding: “A lot of people say it’s too hard to get in, and if you cancel next week, you might as well cancel the following week. So it’s going to be an early Christmas shutdown.”
The hospitality sector is already reeling from rising energy costs, staff shortages and falling bookings, leading UK restaurants to go out of business at a faster rate than during the Covid crisis. .
“Restaurant business insolvencies are now occurring at a much faster rate than during Covid,” said Rebecca Dacre, a partner at Mazars. “It’s a very toxic combination of rising input costs, steeply rising financial costs and weak demand. Most restaurateurs have never seen this combination of negative factors before.”
Industry lobby groups including UK Hospitality and the British Beer and Pub Association said last month that more than a third of hotel companies could go bankrupt by early 2023.
While the industry saw a rebound in business this summer after a series of forced closures during the Covid lockdown periods, restaurants are now battling rising inflation, which has not only increased the cost of energy, food and drinks, but it meant that his customers had less money. to spend on going out.
Barclaycard recently reported that more than half of Britons were planning to cut essential spending, raising concerns about income over the Christmas period, when many businesses make the lion’s share of their profits.
Some companies are also having difficulty recruiting enough employees as post-Brexit immigration rules prevent EU citizens from working in the UK. This has contributed to higher wage inflation.
Mazars said the combined pressures are likely to spell a difficult few months for the industry, despite the generally lucrative holiday period.
“The Christmas business period is usually an excellent period for hospitality businesses. However, restaurants will be preparing for a very harsh winter and many will face a real battle to stay afloat,” Dacre said. “There is a certainty of more insolvencies if they don’t get much more government support, but the chances of the government fully opening the taps are slim.”