Bars and restaurants 'at risk of closure' this Christmas amid rising costs and lack of parties

Bars and restaurants are being threatened by spiralling costs and a lack of Christmas parties, hospitality chiefs have warned.

The number of bookings for festive fun is believed to be lower than normal for this time of year, as economic uncertainty forces people to cut back on spending.

Amid rising energy bills and inflation, industries hit by soaring costs are being told to prepare for a “rocky road ahead” by financial experts.

UK Hospitality Scotland executive director Leon Thompson told STV News that some venues had decided to not offer Christmas parties.

That leaves businesses facing a third consecutive festive wipeout after Covid lockdown rules prevented gatherings in 2020 and 2021.

He said: “Hospitality businesses are contending with unprecedented rising costs, whilst customers are hit with their own cost-of-living crisis. Inflation, rising energy bills and interest rate rises are squeezing already hard-pressed businesses.

“This is resulting in some members opting to close for the winter in order to conserve cash as it is just too expensive to stay open. Others have scaled back opening times or have reduced service in order to make savings.

“The steps businesses are taking is also in response to very low consumer confidence, with people spending less whilst out, limiting their visits or not visiting hospitality venues at all.”

Meanwhile, a greater proportion of households in Scotland are struggling with the cost-of-living crisis than those in England, a UK-wide study has found.

The survey revealed 21% of Scottish households were in “serious financial difficulty” with families cutting back on things such as food, energy consumption and other expenditure.

A new Ipsos survey carried out for the Evening Standard also found that 57% of people planned to spend less this Christmas – with just under half saying they’ll cut back on festivities and nights out.

“Many businesses are very concerned about the lack of Christmas and Hogmanay bookings,” Mr Thompson said.

“However, some businesses have already reduced or decided not to offer Christmas parties and lunches as the costs are too high and consumers will be unable or unwilling to pay the higher prices.

“Christmas and New Year is a crucial time for hospitality and if businesses experience another poor trading period, or are unable to trade at all, then more will be at risk of permanent closure.”