Bristol hoteliers pin hope on ‘Christmas miracle’ amid challenging times

Members of the Bristol Hoteliers Association (BHA) have expressed concerns on the imminent challenges posed by the National Living Wage hike, set to take effect next April.

With a nearly ten per cent wage increase announced by the chancellor in his autumn statement, BHA fears that this move will intensify financial strains on their businesses, pushing them towards the need for a “Christmas miracle” to remain afloat.

Raphael Herzog, chair of BHA, said the extension of the business rates relief scheme is cold comfort in the face of the increased wage costs and the continuing high prices for energy, food and drink.

He said: “The fact that the chancellor chose to freeze alcohol duty is one less cost for us to take on but it’s only a temporary reprieve, until August next year.”

BHA said the extension of the business rates relief is cold comfort in the face of the increased wage costs – photo: Hotel du Vin

Herzog stressed the importance of far-reaching solutions as opposed to “quick fixes”, saying: “we need longer term support if our businesses are to be sustainable”.

The hotelier continued: “Industry bodies have, for some time, been calling for reductions in VAT and employer contributions to National Insurance.

“While any reprieve from increasing costs is going to help, we need long term support and solutions, not quick fixes.”

He added: “While the measures around business rates and alcohol duty announced in the autumn statement are very welcome, there don’t go anywhere near far enough to giving hospitality businesses the support they need.”

Furthermore he warned of potential price hikes in the hospitality industry to “make ends meet”, saying: “While we will just have to try to absorb the cost of the Living Wage increase as much as we can, as we are reluctant to increase what we charge our customers, but some price rises are likely in order for us to be able to make ends meet.

“The rise in Living Wage is higher than was forecast in March, and effectively blows out of the water any benefit to our businesses through the extension of business rates relief.”

The chair of BHA lamented the spending patterns of public since the pandemic and the ensuing “vicious circle” faced by the industry.

“People are still generally being cautious with their money, so if you look at Christmas party bookings, for example, they are currently at a similar level to last year, but nowhere near where they were in 2019,” said Herzog.

“We want people to come to us for their festive events, but we’ve had to raise prices for a party at a restaurant or a hotel because the costs to the venues have gone up again, it’s a vicious circle that, without further government support, is going to take miracle to break out of.”

He added: “A reduction in VAT is the most effective way the government can ease the tax burden for the hospitality sector and give businesses which are struggling the most a better chance of being able to keep going.

“The reduced rates of VAT that were introduced during the pandemic were a huge help and if something like that was to be introduced again, even if for a temporary period, it would be a significant show of support and vote of confidence in our sector.”

Main photo: BHA

Read next:

• Bristol hoteliers call hospitality the ‘forgotten sector’ 
• Bristol hoteliers seek government help to avert ‘insurmountable’ business rate bills
• Hoteliers urge government to relax post-Brexit rules

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