Published: 2024-03-03 by, News Team in the Business & Finance news category

Hospitality Industry Faces Existential Threat, Calls for Urgent Action

New figures reveal a sobering reality for the North East as one pub closed its doors every two weeks last year, triggering concerns about a continuing trend that could persist for the foreseeable future.

According to statistics published by the British Beer and Pub Association, 54 pubs shut down across the region in 2022 and 2023, resulting in approximately 650 job losses. The closures highlight an ongoing pattern that threatens the fabric of pub communities, particularly in rural areas where job opportunities are scarce.

Nationwide, the hospitality industry grappled with 500 pub closures in 2023. This occurred amidst a challenging landscape marked by soaring energy costs, increased labor expenses, rising raw material prices, and a burdensome tax regime.

Emma McClarkin, Chief Executive of the British Beer and Pub Association, underscored the sector's substantial economic contribution, injecting £26.2 billion into the UK economy and generating £15.1 billion in tax revenue. McClarkin urged the government to revamp the business tax system to support an industry that sustains 936,000 jobs, ranging from farmers to brewers, pub landlords, and their staff.

"The closure of 54 pubs over the past two years is a significant blow to the sector and local communities," remarked McClarkin. She emphasized the urgency for local councils and the government to reassess business rate relief policies to bolster struggling businesses.

The closure figures coincide with announcements such as the decision by the owner of The Punchbowl Hotel in Jesmond, Newcastle, to cease operations. Dave Carr cited exorbitant utility bills, COVID-related repayments, and rampant inflation as reasons for discontinuing the venue's tenancy.

Carr lamented the stifling effect of cost controls on creativity within the leisure industry, expressing concerns about the homogenization of public preferences and the erosion of opportunities for innovative ventures.

In parallel, a report from the Society of Independent Brewers (SIBA) revealed a disproportionate closure rate of breweries in the North of England, with 14 breweries shuttering in the North East over the past two years.

The data paints a grim picture of the challenges facing the North East's pub and brewery landscape, prompting calls for concerted efforts to safeguard these integral elements of local communities and economies.

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