Trade body UK Hospitality says its members – battered by two years of pandemic disruption and a Christmas marred by the Omicron variant – now face higher costs for energy, labour, food, drink, and insurance.

A survey by UK Hospitality found that prices across the sector were set to increase by an average 11% this year.

UK Hospitality said that on top of two years of severely-disrupted trading and a Christmas period spoiled by Omicron restrictions, it is facing steep increases in energy (41%), labour (19%), food (17%), drink (14%) and insurance (21%) costs.

Many of the businesses it represents are mired in debt and running out of cash, the organisation said.

It is calling for the government to ease the burden by making permanent its current reduced rate of VAT for the sector, of 12.5%, which is currently due to expire at the end of March and return to 20%.

UK Hospitality chief executive Kate Nicholls said: “Omicron has infected the start of 2022 with lower-than-expected trading levels and higher than expected cancellations in hospitality venues.

“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.

“This can only cause the UK’s wider economic recovery to stutter.”

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Original article from Uk Hospitality