Hotels, restaurants and pubs expect more than a third of their bookings to be cancelled this month as the threat of rail strikes during the peak Christmas party period hits trade.
The trade body UKHospitality said it expected the strikes to cost businesses about £1.5bn in lost sales and other knock-on effects, with a lack of a breakthrough deal pushing up expected cancellations to 35%-40% from 20%-30% at present.
Restaurants said they have also been hit by England’s success in the men’s football World Cup, with a slew of cancellations for this Saturday, usually one of the busiest nights for festive gatherings, when the team are due to play France in the quarter-finals.
Sacha Lord, the night-time economy adviser for Greater Manchester, said the downturn in bookings was coming at the worst time for hospitality businesses, which usually ring up a third of their annual sales in December.
“Down to complete uncertainty [about strikes], people are still in the mindset of last year when we had Covid and are cancelling plans again.” He said the hit to the festive season for the third year running was “absolutely devastating” after the Covid restrictions of 2020 and last year’s wave of cancellations triggered by the spread of the Omicron variant.
“Before the strikes, I was concerned how businesses were going to make January to March with the cost of living creeping up, so this is a real hard pill to swallow,” Lord said.
Manchester is trying to persuade locals to “give the gift of going out” this Christmas as visitor numbers have also been dealt a blow by Avanti train service cancellations linked to staffing problems, with as many as a fifth of bookings already cancelled as a result.
The effect of the strikes will pile additional pressure on businesses across the UK that are already struggling with lacklustre bookings, labour shortages and increased costs – from energy bills and payroll to the price of ingredients.
Households are also reining in spending on non-essentials, such as meals out and trips to the pub, as they deal with rising living costs.
Research from Barclaycard this week found that 45% of the public are planning to scale back on festive parties and socialising this year because of financial pressures.
UK restaurants are already going bust at a faster rate than during the Covid crisis, with closures in the sector up by 60% over 2021-22 to 1,567, compared with 984 during 2020-21, according to the advisory firm Mazars. It found 453 had gone out of business over the past three months, up from 395 in the previous quarter.
Closures announced include the Michelin-starred Peel’s in Solihull, the Walthamstow, east London, outpost of pie and mash shop L Manze after 36 years, and celebrity chef Michael Caines’ Harbourside Refuge in Porthleven, Cornwall.
Restaurants are under acute pressure, but the future for pubs and bars may be slightly brighter.
Barclaycard found that spending at bars, pubs and clubs was up – they enjoyed a strong early November thanks to the rugby, cricket and Formula One, and the expectation is that the World Cup will continue to encourage spending.
