Hospitality businesses such as pubs and bars are an extremely important part of the UK economy, but in recent years, such venues have faced an ever mounting list of economic challenges. During the pandemic, in an attempt to curb the spread of the coronavirus, pubs, bars, restaurants and hospitality venues were amongst the first businesses to have to close, and were amongst the last to re-open in any capacity.
After long periods of closure, and months of operating in a restricted way, pubs and bars have subsequently been hit by the same challenges facing other businesses and individuals. Rising inflation, skyrocketing energy prices, along with lower footfall caused by the cost of living crisis and ongoing train strikes have meant that even with support to recover from the challenges of covid, the hospitality sector is facing an economic storm.
The result of extended periods of significant economic challenges has resulted in a significant rise in pub and bar insolvencies. Statistics from National Accountancy Firm, UHY Hacker Young state that the number of insolvencies in this area of the hospitality sector increased from 280 in 2020/21 to 512 at the end of last year. When you consider the financial issues facing pubs and bars, in addition to staffing shortages, these numbers aren’t much of a shock.
Avoiding Pub and Bar Insolvencies
Whilst it is a hard time for the hospitality industry, there are steps that businesses can take to help reduce their costs and find ways to take on the challenges facing them. A key step for many pubs and bars has been to review their opening hours and alter them to better match peak business times, choosing to light and heat their space during hours that see the most returns.
Another important step for pubs and bars is to find effective ways to market their business and drive more footfall. For example, now that there are no longer restrictions on numbers or serving hours, venues can look to put on special entertainment events, hold special offers and experiment with different menus to generate interest in their business.
Needless to say, even when working hard to cut costs and generate more revenue, wider economic challenges can make financial difficulties an inevitability for some businesses.
The most important thing that hospitality businesses should do if they are concerned about the future of their company in the current economic climate is to seek professional advice as early as possible. With a lot of businesses operating with reduced staff, either as a result of staffing shortages, or in an attempt to cut costs, the result can be that business owners and management teams are too busy trying to get through each day to take time to make a proper plan to protect their business.
At times of uncertainty, independent advice from an insolvency practitioner can help pub and bar companies to identify the best plan of action for their business, whether this be restructuring, cutting costs, raising finance, increasing sales, or if the business is insolvent, finding the best course of action for liquidation.
Independent Insolvency Advice
If you are worried about the growing number of pub and bar insolvencies, and are increasingly concerned with the financial pressures on your hospitality business, it’s important to seek advice from a Licensed Insolvency Practitioner at the earliest opportunity. The earlier you ask for guidance from an independent insolvency consultant, the more options there are likely to be for your business.
Make your first call today to arrange a free, no-obligation consultation to discuss the challenges facing your business.