Rail strikes have cost bars, pubs, restaurants and hotels in the UK at least £1.5 billion in December alone and, coupled with the cost of living crisis, will result in “a huge number of businesses and places of lost work”, reported industry bodies. warned
Kate Nicholls, chief executive of UKHospitality, said the financial impact of the rail strikes on the industry was worse than expected, creating a “perfect storm” for businesses struggling with the rise of energy bills and inflation which means “we will certainly see more business failures”. in the next three months.
Michael Kill, chief executive of the Night Time Industries Association (NTIA), said: “Industrial action and cost inflation pressures have decimated trade across the night time economy, and many are very concerned that the night New Year’s Eve and New Year’s Day are further apart. affected by the train strikes.”
Nicholls said the recent transport strikes had led to a wave of cancellations of Christmas parties and dinners planned for the week of December 12. UKHospitality had estimated a £1.5bn hit from the December and January strikes, but now says recent industrial action led to losses of that magnitude in the past month alone.
Nicholls told BBC Radio 4’s Today programme: “December’s success was more significant than we anticipated in terms of a slowdown in high street consumer traffic throughout this week.”
The NTIA has predicted that the loss in trade for its members will be even higher, at £2 billion. Its boss said many businesses lost up to 50% of revenue during the key holiday period, which they were heavily relying on to see them through to early 2023, a traditionally quieter period.
“The government’s delayed announcement on the extension of energy relief has left many facing further uncertainty and once again the inability to plan,” Mr Kill said. “We will certainly now see a large number of businesses and jobs lost in January due to government inaction.”
UKHospitality and the NTIA called for more support from the government on energy prices beyond April, when the current price cap ends.
Rail unions led by the RMT have staged a series of strikes since June in a dispute over pay and working conditions. Several more days of strike action are expected next week, when the RMT will return to action for four days, while the Aslef union, which represents the drivers, is on strike on January 5.
UKHospitality has been tracking money coming into coffers and cancellations across the sector.
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Nicholls said that after the train strikes were announced for the week of December 12, “we saw cancellation rates of 50% to 60% in central London and 20% to 30% elsewhere of the country directly attributable to those days of strike”.
Traffic data from cities and town centers showed strike-day sales across the UK were down 27%, he said, while in central London and the city had fallen 46%. Nicholls added that this had been happening all year, since the strike dates were first announced in May.
Around 2,500 hospitality premises were forced to close in the last quarter and this trend is likely to continue in the new year due to the high cost of doing business, the head of UKHospitality said. “Businesses are in a perfect storm with rising energy bills, high input cost price inflation above 20% for the first time and the cost of living crisis affecting consumer confidence.
“Without a doubt, it will be a very tough first quarter for the hospitality industry. It’s traditionally a much quieter season for us (January, February), traditionally you get 70% of normal trading in those two months, whereas in December it’s 130% of normal month trading, so that much more profitable sales are lost in December. This means that these companies are much more vulnerable and fragile from January.”