00:00Hospitality is woven deeply into the North East economy,
00:04from pubs and restaurants to hotels, music venues and visitor attractions.
00:09But businesses across the region are balancing weaker customer spending
00:13against higher staffing, energy and supply costs.
00:17With tens of thousands of local jobs linked to hospitality,
00:21pressure on individual venues can quickly become pressure on livelihoods and high streets.
00:28The difficulty that these businesses or organisations have, of course, is covering their costs.
00:33And the fact is, though, if we come to sort of having a meal, as it were,
00:36say, you know, the average family, two parents and two children,
00:39you know, what are you looking at?
00:40Probably sort of, you know, the big end of £100 to go out.
00:43Now, people are sort of cash strapped, people are counting their pennies.
00:46So if people don't go out, these places, of course, are not having the sort of the, you know, the
00:50footfall.
00:51And of course, if you're not having the footfall, you've got no income.
00:54And of course, you get into a situation where it's loss-making and that can't be sustained.
00:59The North East has particular exposure because hospitality and tourism
01:04account for a sizeable share of the regional economy.
01:08The North East Combined Authority says hospitality supports around 91,000 jobs
01:14and contributes around £1.6 billion in economic output.
01:19Visitor spending also feeds hotels, restaurants, pubs, attractions and their suppliers from the coast to town centres.
01:29Businesses have been dealing with higher wage bills, energy costs and food prices
01:33at the same time as customers become more cautious.
01:37From April, the national living wage increased again
01:40and employer national insurance remained at 15% above the relevant threshold.
01:46Qualified hospitality properties moved into lower permanent business rate multipliers.
01:52Pubs and live music venues can receive an additional 15% rates reduction during this financial year.
02:01Regional leaders have also announced millions of pounds in wider business support
02:06aimed at helping firms manage costs and protect jobs.
02:09The hospitality industry says more is needed nationally.
02:14UK hospitality is pressing for VAT to be cut to 10%.
02:18Further, business rates reform and lower employment taxes.
02:24In a region where visitor spending supports so many jobs,
02:28weaker footfall can ripple quickly through supply chains, staffing decisions and local high streets.
02:34So I think it's going to be tough times and of course we've got a sort of a budget coming
02:38up at the end of October
02:39and I suspect that, you know, we're going to feel the squeeze now.
02:42Of course, that's not to say that sort of John Healy may sort of introduce more sort of measures
02:46which the hospitality industry is calling for,
02:49but particularly a cut in sort of business VAT or business rates and VAT rather.
02:53But undoubtedly, it's probably going to be sort of small beer compared to sort of the crisis they face in
02:59general.
