Tube strikes could cost hospitality businesses £110m

Pubs, bars, cafes and restaurants in the capital have braced themselves for a horrific week, as industrial action hits all Tube lines except the Elizabeth and Overground Line.

The four-day strike, which is being staged by the RMT membership, is over pay and conditions but centres upon a push for a 32-hour working week. It coincides with action on the Docklands Light Railway (DLR), which will also cause disruption.

It comes at a time when many hospitality businesses say that they are “surviving not thriving”; and is predicted will hit their takings hard.

Counting the cost

UKHospitality has claimed that the cost to businesses in the capital could be as much as £110m with both customers and staff unable to get into London.

Kate Nicholls, the organisation’s chair, told LBC that “this level of impact comes at a time when businesses can least afford it, having just been hit with £3.4 billion in additional annual cost”.

However, the Centre for Economics and Business Research says the figure is a massive under-estimation, writing that the cost could amount to as much as £230m.

This figure, it claims, “reflects the loss of roughly 700,000 working days across both TfL staff and the wider commuter base.”

It added: “These figures only capture the immediate disruption, but the true economic hit is likely to be significantly higher once the indirect effects are considered.”

Knock-on impact

In February 2023, the CEBR predicted a planned one-day of industrial action would cost £94m, “with a further estimated £100m hit to hospitality sectors as footfall vanishes”.

The organisation argues that there are direct impacts – namely staff struggling to get into work and lower customer footfall – but also indirect implications.

It explains that more traffic on the roads will mean that commuters take longer to get to work hence impacting productivity. It also suggests that the businesses around the commuter stations outside of London will see lower footfall as people opt to work from home.

However, despite headlines warning of huge ramifications then and now, The Times published an article in April 2023 saying that the impact on the UK economy had not been as bad as predicted.

More bad news

For hospitality business owners in the capital, though, this will come as little consolation. One business owner told BBC News that he was bracing for a loss of around £600-£700 a day.

The hospitality industry is already reeling from the impact of changes to employer National Insurance Contributions and the Skilled Worker Visa, which has made finding talent even tougher.

These issues, on top of a dip in consumer spending and produce price hikes, are making day-to-day life hard for hospitality business owners.

While the real economic impact won’t be gauged for several months – and even then there will be a debate on its accuracy – for hospitality business owners, this is just another kick when most are already far down.