Nearly a third of hospitality leaders say their profits have fallen year-on-year: Mounting costs have strained businesses’ margins, with nearly a third (31%) of hospitality leaders saying their profits have fallen year-on-year, the latest Business Confidence Survey from CGA by NIQ and workforce management software provider Sona reveals. Just over a fifth either operated at a loss (15%) or broke even (6%) in the first quarter – treble the number of 5% in the last quarter of 2024. Nearly three in five (59%) leaders said they currently have fewer than six months' worth of cash reserves, while one in ten (10%) consider their business is at risk of failure in the next 12 months. Furthermore, nearly two thirds of leaders have reduced their staff count (65%) and/or cut the hours available to their staff. Significant numbers have deferred pay increases (40%) and reduced spending on employee benefits and training (both 29%). Following the sharp increases to national insurance contributions and minimum and living wage levels in April, four in five (80%) leaders report that wage bills are now significantly higher than they were 12 months ago, and nine in ten (91%) said increased employment costs are a concern for the next 12 months. There has been some relief on energy bills, however, with well over half (57%) of leaders reporting these have decreased year-on-year. Karl Chessell, director – hospitality operators and food EMEA at CGA by NIQ, said: “The double whammy of higher costs and softer trading have hit hospitality businesses hard. It is particularly frustrating that so many of the increases in employers’ outgoings – from labour bills to taxes to inflation to compliance with legislation – are out of their control. These costs are choking hospitality businesses and compromising the investment and employment that are so important to the UK economy. The longer term outlook for the sector remains good, but it deserves much better support than it is currently getting.” Paul Watson, Sona’s vice-president of hospitality, added: “The hospitality industry is continuing to endure a storm of economic challenges, stifling growth and draining productivity. Now isn’t the time to weather the storm, it’s the time to empower businesses to operate as efficiently as possible in order to help them trade their way out of trouble.”