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Friday read: Maximum impact – the cancelled train strikes impacting bookings by 50%

Published:  19 January, 2024

The ongoing threat of strikes is causing unmitigated damage to the UK hospitality industry, with business telling Harpers they can impact trade by 50% or more, even if they don’t go ahead.

The latest of round of strikes organised by rail union Aslef is due to take place between 30 January and 5 February and could cost the sector upwards of £340m, UK Hospitality (UKH) has said.

But what is the financial cost to businesses even if industrial action doesn’t then take place, with bookings already cancelled and potential customers wary of travelling via public transport in case they meet with disruption?

The figure is difficult to pin down. As UKH tells Harpers, it would be “very hard to speculate and depends on when the cancellation of a strike action may occur”.

However, reports from the sector are stark.

“We see an immediate effects of strikes on our bookings,” reports top sommelier Isa Bal, who is also the co-founder of London's Trivet restaurant. “A 50% decrease in booking and/or [increase in] cancellations isn’t an overestimate.” 

Saurabh Kukreja, general manager of The Gantry Hotel, also in London, added: “Even if the strikes do not proceed, we have observed a significant increase in cancellations.

“Specifically, our business experiences a two-fold rise in cancellations, translating to a potential loss of up to £23,000 per week. This substantial loss in revenue underscores the considerable financial implications of strike announcements. Moreover, we face challenges in quantifying the reduction in new business pick-up during these periods. While the exact impact on acquiring new customers is difficult to measure precisely, it is recognised as a significant challenge that contributes to the broader implications of strike announcements on overall business growth. In our experience, last minute cancellation of the strike does not bring any positive impact to the business as most people will not make last minute plans to travel again.”

In the case of the February strikes, the impact is likely to be more keenly felt by businesses as bookings and footfall inevitably slide back down from December highs.

This is certainly the case for Trivet and Bal, who shares that January in particular is “traditionally a difficult month to cope with, putting huge pressures on cash flow and so on. These strikes don’t help and are literally killing many, especially smaller businesses.”

Rail strikes have become noticeably more prevalent and impactful in recent years, with UKH estimating they have cost the sector around £4 billion. Timed for maximum impact, the 2022 Christmas strikes struck a brutal blow for hospitality in its first fully fledged Christmas period since Covid. It was little consolation for many that last month's strikes took place at the beginning of December and not closer to the all-important week leading up to the 25th. 

This month’s planned tube strikes were abandoned at the last moment, and many are hoping that the same will happen with those currently scheduled. However, for many it will be too little too late.

“As we saw with tube strikes earlier this month, which were cancelled right at the last minute, much of the impact will still be felt by businesses as people who have cancelled plans or made arrangements to work from home will still do so,” Kate Nicholls, UKH’s chief executive told Harpers.

“That’s why we continue to call for urgent negotiations to reach a resolution that avoids this round of strikes and any further action.”

It follows that campaigning for a resolution on strikes is now a key focus for UKH as bosses try to balance the needs of the transport industry with those of the hospitality sector and high streets more generally.

Among businesses who rely on this footfall however, it is perhaps unsurprising that sympathy is hard to come by.

“I am sympathetic to the transport work wars in principle,” says Bal. “But I think they are going about this totally the wrong way and losing any sympathy from the public at large.

“That said, I think an equal amount of the blame also lies with the government, who I hope to see the back of as soon as possible.”

As we saw from our recent State of the Nation survey, uncertainty and unreliability are two key factors impacting businesses in today’s fraught economic and political climate. We see this playing out with the strikes too, where the most detrimental impact of their announcement is unquestionably the compromised ability of consumers to plan and travel.

This is certainly the most noteworthy impact for Kukreja, who says the uncertainty dissuading individuals to travel has “subsequently prompted a shift back towards remote meetings and remote business activities. This shift in behaviour is particularly damaging as it not only affects current bookings and reservations but also hampers the acquisition of new business. The reliability of travel plans serves as a fundamental factor influencing consumer decisions, and the fear of disruption during strike periods acts as a deterrent, impacting the overall stability and growth potential of our business,” he concludes.