Cost of living crisis is worse than Covid-19 for hospitality sector

Economic advisor Sacha Lord warned that expenses for businesses have tripled and along with global supply problems have created a "perfect storm tearing through the heart of the sector".


Pubs, bars and restaurants are struggling more as soaring inflation and energy bills have massively increased outgoings with some venues predicting extra costs of up to £20,000 by the end of 2022. Mr Lord warned that the hospitality sector is now in an extremely perilous position, more so than during the Covid pandemic. He added:

"Trading is now unviable for many and I believe we will see closures at an unprecedented level over the 12 months leading to unemployment on an unimaginable scale."


Last month it was reported that the number of pubs in England and Wales had fallen to its lowest level on record.


A spokesman from HM Treasury said:

"We've stood behind the hospitality sector throughout the pandemic with a £400-billion package of economy-wide support that saved millions of jobs and offered a lifeline to hundreds of night-time businesses up and down the country."


He also said additional support had been given with a Recovery Loan Scheme and a recent £1,000 increase to the Employment Allowance which would cut taxes.


However, Mr Lord is calling for additional support, including a temporary reduction in VAT on business energy bills from 20% to 5% in order to lessen the financial pressures of business owners of devastated businesses in the sector.