The new figures demonstrate the importance of the Chancellor extending the hospitality sector relief and freezing the multiplier at the Autumn Statement, with 38% of hospitality venues failing to make a profit.
The survey, conducted by the British Beer and Pub Association (BBPA), British Institute of Innkeeping (BII), Hospitality Ulster and UKHospitality, reveals Government action on business rates is viewed as a top priority by 60% of respondents, up 16% from August.
The survey also reveals that business optimism has slumped to just 29%, down 10 percentage points from the summer.
A joint spokesperson for the trade bodies said:
“These figures lay bare the enormous impact inaction at the Autumn Statement would have on the hospitality sector. Pubs, restaurants, hotels, coffee shops, to name a few, will fall victim to a significant business rates bill, if relief expires and rates are hiked with inflation.
“Reducing investment and cutting staffing levels are the last thing venues want to do. In fact, they want to do the opposite, but their hands will be tied if rates increase to such an extent in April.
“Businesses are only able to absorb endless cost rises for so long and yet more pressure in the form of business rates will only force them to consider whether this is passed onto consumers.
“The Government must listen to the concerns of hospitality businesses, as the nation’s third largest employer, and extend the hospitality sector relief and freeze the business rates multiplier at the Autumn Statement, and as well as taking steps to reduce the overall tax burden on the sector in relation to business rates, VAT and excise duty.
“These businesses are at the heart of communities and high streets across the country, employing millions, generating economic growth and driving investment across our cities, towns and villages.
“Our economy cannot grow if hospitality cannot grow. The Government must act immediately to underpin this growth and ensure our pubs and hospitality venues survive.”
The survey also highlights the double whammy of rising businesses costs and more cautious consumers, with budgets stretched thin due to the cost-of-living crisis. There has been an 18% rise in businesses noticing consumers purchasing fewer drinks when they go out, with 72% of respondents reporting the number of drinks purchased having decreased slightly (55%) or significantly (17%).
Combined with energy bills being 60% higher year-on-year and record food and drink inflation, 55% of respondents said they had not raised menu prices by as much as their own cost increases.
The survey follows a joint letter written to the Chancellor by the BBPA, the BII, Hospitality Ulster, UKHospitality and other trade bodies in the pub, brewing and hospitality sector in October, urging the extension of business rates relief and a freeze in beer duty