Some firms may struggle to survive
Low oil price is warning for future of hospitality sector
Hospitality businesses face a difficult first quarter with the risk that a large number could close due to a major drop in consumer spending, a business recovery firm is warning.
The low oil price has depressed activity and this is having a knock on effect on the economy around Aberdeenshire, says Derek Forsyth (pictured), business recovery partner at accountancy firm, Campbell Dallas.
There are more than 900 hospitality businesses trading in Aberdeen City and Aberdeenshire and he predicts some fall-out from the sector.
He said: “The North East has already suffered significant job losses during the last two years, but given numerous forecasts of further restructuring in the oil and gas sector, with downstream businesses likely to be affected, we could see a significant impact on the hospitality and leisure sector.
“It is very important that business owners plan ahead and ensure they are on top of their outgoings, whilst also trying to maximise and maintain their income.
“Quick wins include re-negotiating rent, searching for better deals on insurance and telecoms, reviewing staffing and shift patterns, and collaborating with other businesses on joint promotions.”
The British Hospitality Association estimates that hospitality is the UK’s fourth largest employer, supporting 180,000 businesses and employing 3 million people, 44% of whom are under the age of 30.