Hospitality Sector Views Christmas as ‘Critical’

Hospitality enterprises situated in Devon and Cornwall are asserting that this Christmas period is “critical” as they anticipate increased expenses in the coming year. Ben Young, managing director of The Cornwall Hotel Collection, emphasized, “It’s key.” He added, “Next year the increase in costs is getting on for close to a million quid. So, it’s really challenging times ahead.” Scheduled for implementation in April are increases in employers’ National Insurance contributions, the National Minimum Wage, and the National Living Wage, alongside adjustments to Business Rate Relief. The government stated that the measures unveiled in the Budget were intended to “wipe the slate clean” and “deliver the stability businesses so desperately need.” “We’re packed out Thursday, Friday, Saturday nights with Christmas meals,” commented Brett Moreton of Offshore Restaurant and Bar in Torquay. He remarked, “Next year is going to be tricky. We’ve got the wage rises and national insurance to think about.” He concluded, “But at the moment we’re just enjoying Christmas, enjoying the moment and having a great time.” Effective from April, the National Insurance rate paid by employers will increase from 13.8% to 15%, and the threshold at which they commence paying this tax on an employee’s salary will be lowered from £9,100 per year to £5,000. Chancellor Rachel Reeves announced that a 75% relief on business rates, which are levied on most non-domestic properties, would persist at a reduced rate of 40%. Vanessa Clark, who established Indidog Harbourside Restaurant in Falmouth in 2019 and employs up to 35 staff members, stated, “We are happy to pay staff more as there is no business without them and we want them to be happy,” further noting that the changes would be “too much for most companies to bear.” “I don’t think there is a hotelier in England that isn’t apprehensive about next year. Not even the big boys,” expressed Stephen Furness, owner of the Belgrave Sands Hotel and Spa in Torquay. He added, “It’s just the overheads are massive, absolutely massive.” “Bookings are up,” observed Allen Simpson, the deputy chief executive of UK Hospitality, an organization representing the industry. He highlighted, “This is the first Christmas in five years where we haven’t had a pandemic, strikes or huge inflation.” He further commented, “The worry is more about next year,” citing costs that are “racing ahead including £124m in additional National Insurance contributions in the South West alone.” A Treasury spokesperson commented, “We delivered a once-in-a-parliament Budget to wipe the slate clean, deliver the stability businesses so desperately need and the OBR confirmed that in the round it delivers lower unemployment and higher wages over the coming years.” The spokesperson continued, “At the same time, more than half of employers will either see a cut or no change in their National Insurance bills and employers of lower paid employees will typically pay less per employee.” They also stated, “We are also delivering a pay rise for millions of workers from April 2025 thanks to the increase in the National Living Wage and National Minimum Wage.” The spokesperson added, “Without our action, business rates relief for retail, hospitality and leisure would have ended in April next year. Instead, we are extending 40% relief for 250,000 properties.” Concluding, they said, “And because hospitality matters, we are introducing a permanent, new lower business rate in 2026.” For updates, follow BBC Cornwall on X, Facebook, and Instagram. Follow BBC Devon on X, Facebook, and Instagram. Story ideas can be sent to spotlight@bbc.co.uk. Copyright 2024 BBC. All rights reserved. The BBC bears no responsibility for the content of external sites. Information regarding our approach to external linking is available.