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Christmas 'critical' for hospitality

BBC A group of people sit around a long dining table in a bar. There are Christmas crackers on the table and Christmas decorations in the background. The group are holding their wine glasses up in a 'cheers' action. BBC
"Bookings are up" said Allen Simpson, deputy chief executive of UK Hospitality adding "the worry is more about next year"

Hospitality businesses in Devon and Cornwall say this Christmas is "critical" as they face rising costs next year.

"It's key," said Ben Young, managing director of The Cornwall Hotel Collection. "Next year the increase in costs is getting on for close to a million quid. So, it's really challenging times ahead."

Increases in employers National Insurance contributions, National Minimum Wage and National Living Wage and changes to Business Rate Relief come into force in April.

The government said the measures announced in the Budget would "wipe the slate clean" and "deliver the stability businesses so desperately need".

A man stands in a busy restaurant. There is dining table in the background that has around a dozen people sitting around it. There are Christmas decorations and festive lights around the room.
"Christmas is a really important time of year for us," said Brett Moreton of Offshore Restaurant and Bar in Torquay

"We're packed out Thursday, Friday, Saturday nights with Christmas meals," said Brett Moreton on Offshore Restaurant and Bar in Torquay.

He said: "Next year is going to be tricky. We've got the wage rises and national insurance to think about.

"But at the moment we're just enjoying Christmas, enjoying the moment and having a great time".

From April, the rate employers pay in National Insurance will rise from 13.8% to 15%, and the threshold at which they start paying the tax on each employee's salary will be reduced from £9,100 per year to £5,000.

Chancellor Rachel Reeves said a 75% relief on business rates, charged on most non-domestic properties, would continue at a lower rate of 40%.

A woman with long brown hair, talks to camera from home, there are wall lights in the background.
Vanessa Clark, owner of Indidog Harbourside Restaurant in Falmouth, said she was facing an increase in costs of about £45,000 next year

Vanessa Clark opened Indidog Harbourside Restaurant in Falmouth in 2019 and employs up to 35 members of staff.

"We are happy to pay staff more as there is no business without them and we want them to be happy" adding the changes would be "too much for most companies to bear".

A man stands in the entrance foyer of a hotel. There is a reception desk and bar in the background, with customers walking through the foyer.
"The overheads are massive," said Stephen Furness, owner of the Belgrave Sands Hotel & Spa in Torquay

"I don't think there is a hotelier in England that isn't apprehensive about next year. Not even the big boys," said Stephen Furness, owner of the Belgrave Sands Hotel and Spa in Torquay.

"It's just the overheads are massive, absolutely massive."

"Bookings are up," said Allen Simpson - the deputy chief executive of UK Hospitality, which represents those in the industry.

"This is the first Christmas in five years where we haven't had a pandemic, strikes or huge inflation."

He said: "The worry is more about next year.

"With costs racing ahead including £124m in additional National Insurance contributions in the South West alone."

A Treasury spokesperson said: "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.

"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.

"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.

"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.

"And because hospitality matters, we are introducing a permanent, new lower business rate in 2026."

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