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The hospitality sector is facing further financial challenges as decisions made in last October’s budget begin to be implemented, the Bristol Hoteliers Association (BHA) has warned.
With the post-Christmas period being traditionally a quiet time for the sector, energy costs rising and increases in employer National Insurance contributions as well as the minimum wage and property rates, the sector is preparing to be “hit” in April.
BHA chair Raphael Herzog said: “The NI contribution and wage increases present a double-edged sword, because we are still struggling to recruit the levels of staff we need, but at the same time the costs of employing staff are significantly rising.
“The 2024 festive period was not as busy as in some previous years as both private and corporate customers are being forced to keep a much tighter hold on their own purse strings. We saw a drop in the number of parties this past season, fewer companies paying for their teams to have a celebration, and in general people are not spending as much as they used to, and not drinking as much.”
Recently, figures from the British Beer and Pub Association showed more than 120 million pints of no and low-alcohol beers were drunk across the UK in 2023 and that is expected to rise by a further 20 million by the time the figures for 2024 are analysed.
Herzog said: “Today’s teams are less inclined to centre their get-togethers around alcohol, as they have done in the past.
“Younger people are generally more health conscious and there is evidence to show that more and more people are turning to low and non-alcohol drinks which, in turn, is seeing them seek a different type of ‘team celebration’ over the festive season.”
In addition, there are still ongoing issues with Airbnb, which can offer cheaper accommodation to guests due to not being affected by the same regulations as the rest of the hospitality sector.
Herzog explained: “We still say there should be limits on how many days properties can be let for, and for homes to be licensed. It’s just our businesses that are affected by Airbnb; there’s a massive shortage of properties to rent in Bristol and Airbnb is one of the reasons for this.”
He said plans for a new arena on the former Filton airfield, in the north of the city, as well as a multi-million pound ‘sporting quarter’ development in the south of the city, offer opportunities for Bristol’s accommodation providers – as long as their businesses can survive long enough to benefit from these projects which are still years from completion.
He added: “In the budget last October, the Chancellor did announce that Labour intends to introduce two permanently lower tax rates for retail, hospitality and leisure properties.
“We don’t yet know any more about what this might look like and, in any event, these new rates are not expected to be introduced until 2026/27, so it will be some time before we get any kind of benefit from that.”
