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Hospitality operating costs hit 55.2% of turnover



Hospitality operating costs have increased to 55.2% of turnover before rent – the highest since 2007, the latest report from UKHospitality and specialist business property adviser, Christie & Co has revealed.


The survey of over 5,000 hospitality businesses covered the six months to December 2021 and highlights the soaring utility, premise and operational costs facing operators in the industry.


The sector has faced relentless economic and operational challenges forcing operators to adapt and look to alternative revenue streams to drive business. Whilst the report notes a contraction in like-for-like sales of 2.3% in comparison to 2019, certain segments saw growth, with accommodation-led businesses leading the way at 9.8% like-for-like growth in revenue, driven by the staycation boom.


Kate Nicholls, chief executive of UKHospitality, comments, “This year’s survey highlights the extreme pressure that hospitality operators are labouring under, with costs soaring to a new record high. We have been working with government to make clear the harm this is causing to our ambitions for growth, investing in high streets and creating skilled roles. It’s imperative that government takes action to help us tackle the inflationary headwinds we face, unlock growth by removing regulatory barriers and creating a tax and investment framework for the future.”