North East hospitality businesses – hotels, bars, restaurants and clubs – face a very difficult first quarter of 2016 with the risk that a large number could close due to a major drop in consumer spending, Derek Forsyth, Business Recovery Partner is warning
There are just over 900 hospitality businesses (businesses with licenses, excluding retail) trading in Aberdeen City and Aberdeenshire. Even a 10% closure rate would result in over 90 businesses ceasing to trade.
Derek has extensive experience in this sector and is warning that many businesses will face serious cash flow and very difficult trading in the first three months of the year as consumer spending contracts, but costs remain stable.
He said: “Once the festive period is over business and income traditionally drops rapidly in January, however operational costs such as rent and overheads remain, leading to serious cash flow problems. 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. To help businesses tackle the problems we have launched a ‘Hospitality Helpline’ that will offer a quick telephone consultancy on the key issues. Good advice now could be the difference between survival and closure.”
Business owners can call the Campbell Dallas Hospitality Helpline on 07551 153 612, or call into the firm’s new larger Aberdeen premises at 23 Carden Place.