Hospitality firms face 11% price hikes as costs soar

THE vast majority of pubs, bars and restaurants are set to hike prices sharply for customers as the hospitality sector faces spiralling costs.

Around 93% of hospitality businesses have said they plan to increase customer prices, according to a survey of 340 operators running 8,200 venues by trade body UK Hospitality. The new data also revealed that firms predicted an average of 11% price rises to offset soaring costs.

Customers face impending price increases amid a cost of living crisis, which will also result in surging energy prices and increased national insurance contributions in April.

Hospitality firms said they need to lift prices after witnessing double-figure increases in energy bills, labour, food and drink prices and insurance costs.

Surveyed bosses told the trade body that energy costs particularly hit them hard, with firms seeing an average cost surge of 41%. The planned price increases come after the sector saw the key Christmas trading period “devastated” by the spread of the Omicron variant and resultant pandemic restrictions.

VAT on food and soft drinks is also set to increase, back from 12.5% to 20%, and witness an increase in business rates in April.

Kate Nicholls, chief executive of UK Hospitality, said: “One in three businesses in our sector have no cash reserves left and are already carrying heavy debt burdens. Many of our community pubs, restaurants, hotels and hospitality venues will therefore fail as the cost-of-living crisis bites, causing demand to falter.”