Rail strikes create a further £350M hole in hospitality sector with many tipping into administration

The hospitality industry has warned of an estimated £350 million hit from the latest train strikes, lifting the cost to businesses to more than £4 billion since the action began.

The Night Time Industries Association said it was “deeply concerned” about the “significant repercussions” that industrial action organised this week by Aslef, the train drivers’ union, would have on the night-time business economy.

It said that the industrial action would “exacerbate the challenges already faced due to the current economic situation”, tipping even more hospitality businesses over the edge and into administration.

The strike action began on Tuesday this week, with a ban on overtime running from Monday this week until next Tuesday.

According to NTIA figures, there was a 22 per cent increase in hospitality businesses filing for administration last year compared with 2022, and a 91 per cent increase on 2021. Further analysis conducted by Shakespeare Martineau, the law firm, suggests that the hospitality industry accounted for 12 per cent of last year’s administrations.

Last year a total of 1,641 businesses filed for administration, with 190 of those coming from the hospitality industry. The NTIA said: “These figures highlight the true extent of the impact caused by cost inflation and industrial action on businesses within the hospitality sector.”

Michael Kill, its chief executive, said: “Our industry is on the brink of collapse, with billions of lost revenue, increased taxes and the devastating closure of numerous businesses. This has not only impacted livelihoods but has also led to a decline in the vibrancy of cities and towns nationwide.”

Sarah Willingham, chief executive of Nightcap, the operator of bars including Dirty Martini and The Cocktail Club, said: “I genuinely can’t believe that these train strikes have been going on this long, not just impacting the hospitality sector but good, hard-working businesses, small businesses and the high street. The government must intervene. It is time.”