The trade body, which represents some 1,400 independent bars, clubs and live music venues across the UK, has released new research that shows more than half of night time economy businesses (53.2%) are seeing a 30% increase in operating costs compared to pre-pandemic levels.
Nearly half (48%) are 'barely breaking even', with a further 20.2% stating that they're losing money. Some 44.7% of businesses are 'unsure' if they will survive the next 12 months, with an additional 20.8% stating they are 'not confident'.
“Time is running out for the Government and the Chancellor to put measures in place to stem the spiraling costs of living, with inflation reaching 9.1%,” says Michael Kill, CEO of the NTIA.
“Hospitality, night time economy and events industries are facing a bleak summer and uncertainty to what the future holds, with no clear strategy presented by the Prime Minister on when or how this crisis will be averted.”
Kill notes that many businesses are struggling to meet rising operating costs, as well as facing a pinch from customers starting to feel the impact of cost of living crisis.
Those who have renewed both gas and electricity contracts in the last four month have seen a 37% increase in energy costs, according to the NTIA's research, with contract renewals for electricity seeing up to a 54% increase and gas contracts seeing up to 151% increase for businesses.
Additionally, 36.5% of respondents say their weekly sales have dropped by 30% in comparison to pre- pandemic trade levels, with a further 15.5% having experienced up to a 50% loss.
As well as calling for an immediate reduction in VAT to 12.5% across the board, Kill is also asking for the Government to extend business rates relief and introduce an energy cap for small medium enterprise businesses. All three suggestions have received the backing of Sacha Lord, night time economy adviser for Greater Manchester and chair of the board of directors at the NTIA.
“The combined, unrelenting pressures of rising supply costs, energy increases and historic pandemic debt burdens are taking their toll on operators across the hospitality and events sector,” says Lord.
“Having barely recovered from the upheaval of the past two years, they find themselves once again in an uphill battle which, to many, will be simply unsustainable.
“I echo the NTIA and others in industry in calling on the government to implement a temporary reduction in VAT for the hospitality, late night economy and events sector, in order to save the livelihoods of the hundreds of thousands of staff across the UK that the sector employs. And I continue to urge the Chancellor to show greater willingness and support the small and independent businesses across the UK who are the backbone of our economy.”
