High energy costs, regulation, the continuing impact of Brexit on supply chains and employee recruitment and retention, are impacting on margins and on the health and wellbeing of operators and their employees.

Research has found less than a third (29 per cent) of people running hospitality businesses were optimistic about the next 12 months, with nine out of ten (86 per cent) of respondents “concerned” or “very concerned” about the current price of energy.

The problem is perhaps most acute in Scotland, where unlike in England and Wales, rates relief is not available for struggling businesses. Many in the hospitality industry have called for government to intervene, perhaps to require energy suppliers to renegotiate the long-term fixed rate contracts that some businesses are currently struggling with.

Audrey Ferrie, Consultant and licensing specialist at Pinsent Masons

From 1 August, the UK’s alcohol duty will be reformed, removing some of the differentials in rates that existed between types of alcohol. This is arguably the biggest reform of duty for nearly half a century.

With the exception of products with an alcohol by volume (ABV) range of between 3.5 per cent and 8.4 per cent, the rate of duty will depend entirely on the alcoholic strength of the product, regardless of alcohol type. In the mid-strength range, the rates will depend on a combination of alcoholic strength and product type.

Another challenge is the pressure to be green, both from regulators and customers, and increasingly hotels and rental properties now need to consider more proactive and impactful sustainability strategies.

Meanwhile, the Scottish government’s Deposit Return Scheme (DRS) has been delayed until October 2025 at the earliest and the firm due to manage the scheme has gone into administration. If the DRS is implemented, it will place a 20p charge on drinks bottles and cans which can be redeemed by customers if they return the containers to “reverse vending machines” operated in larger stores, shopping centres and community hubs.

Less than a third of hospitality businesses are optimistic about the next 12 months

The UK Government approved a partial exemption to the Internal Market Act for the Scottish DRS, but insisted that glass bottles must be excluded, meaning that the scheme would only cover plastic, aluminium and steel cans. The Scottish Government said the decision by UK ministers meant it could no longer give businesses the assurances they needed over how the DRS would operate.

The draft Terrorism (Protection of Premises) Bill, published in response to the Manchester Arena bombings, would create a new scheme requiring publicly accessible venues and events to put in place terrorism protection training, risk assessments and develop security plans to reduce risk. Venues with a capacity of 100 or over would be subject to a standard duty, while venues with a capacity of 800 or more, and qualifying public events, would be subject to an enhanced duty, with more stringent anti-terrorism requirements.

Some operators are concerned about the practical effects that the draft legislation will have and the cost of compliance – there is no doubt the standard duty will be far reaching and, for some businesses, it will be onerous.

Audrey Ferrie, Consultant and licensing specialist at Pinsent Masons

Hospitality industry is still under serious pressure - Audrey Ferrie

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