Home Business News Alarm raised over the impact of strike action on hospitality sector as administration surge 22%

Alarm raised over the impact of strike action on hospitality sector as administration surge 22%

by Amy Johnson LLB Finance Reporter
30th Jan 24 2:17 pm

The Night Time Industries Association (NTIA), an organisation who represent night-time businesses, are deeply concerned about the recent strike action announced by the ASLEF union.

The strike action, scheduled to take place on Tuesday 30 January, along with the subsequent ban on overtime from Monday 29 January to Tuesday 6 February, will have significant repercussions on the night-time economy and exacerbate the challenges already faced due to the current economic situation.

The impact of this industrial action has lost businesses over 4 billion pounds in revenue over the course of the last years, in addition to the rising cost inflation, which has resulted in a substantial increase in the number of hospitality businesses going into administration.

Analysis conducted by full-service law firm Shakespeare Martineau reveals that the hospitality industry accounted for 12% of administrations in 2023, making it the third-highest sector in the UK.

Last year, a total of 1641 businesses filed for administration, with 190 of those coming from the hospitality industry alone. This marks a 22% increase compared to the previous year and a staggering 91% rise compared to 2021. These figures highlight the true extent of the impact caused by cost inflation and industrial action on businesses within the hospitality sector.

Michael Kill CEO NTIA said, “Our industry is on the brink of collapse, with billions of lost revenue, increased taxes, and the devastating closure of numerous businesses.

“This has not only impacted livelihoods but has also led to a decline in the vibrancy of cities and towns nationwide.

“I urge the Chancellor and the Prime Minister to acknowledge the critical situation unfolding before them and take decisive action. It is crucial that they prioritise the well-being of people and address the crisis at hand. By implementing a reduction in VAT for hospitality and night-time economy businesses across the board, these establishments will have the financial relief they need to survive.”

The night-time economy plays a crucial role in sustaining and enhancing the vibrancy and uniqueness of the UK. It supports a wide range of businesses, including restaurants, bars, entertainment venues, transport operators, hospitality providers, and retailers.

The disruption caused by the industrial action and increasing costs not only affects the livelihoods of business owners and employees but also undermines the UK’s reputation as a dynamic and welcoming destination.

While we acknowledge that industrial action is a lawful means for workers to express their concerns, we believe that dialogue and collaboration are essential in these challenging times. We urge all parties involved to come together and find alternative solutions that address the concerns of union members while minimising the negative impact on the economy.

The NTIA encourages the ASLEF union to consider the far-reaching consequences of their actions and seek solutions that will safeguard both the welfare of their members and the viability of local businesses. We firmly believe that open and constructive discussions can lead to creative alternatives that balance the rights and interests of workers with the needs of the night-time economy.

During this period, we advise individuals to check their travel plans in advance, as services will be operating on an amended timetable. The NTIA will closely monitor the situation and provide regular updates to both businesses and the public through our communication channels.

The NTIA remains committed to supporting the night-time economy and advocating for its sustainable growth. We call on all parties to work collaboratively to find long-term solutions that will secure the future success of our city’s night-time businesses and ensure that our vibrant night-time economy continues to flourish.

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