Deck the halls, put on the Christmas tunes and crack open the bubbly. The UK hospitality industry had high hopes that the first festive season without Covid restrictions for three years would spell a boom in trade. The nation’s pubs, restaurants and hotels were looking forward to a bumper December and seeing their venues host Christmas parties and family gatherings once again. However, a combination of train strikes, snow and frosty conditions have triggered a nightmare before Christmas for the industry and strings of cancellations. Hospitality venues believe about a third of reservations will be cancelled during the peak Christmas-party period because of the continuing strikes by railway workers, which have also emptied out high streets and office buildings as shoppers and commuters opt to stay at home. The spate of cancellations comes at the worst possible time: hospitality businesses usually expect to make a third of their annual sales in December. And they are struggling with soaring costs of food and drink, staffing and energy, all at time when consumers are tightening their belts. More transport strikes are planned by 40,000 RMT members from the evening of Christmas Eve until 27 December, meaning some in the industry fear the impact of industrial action could be as bad as last year, when concerns about the Omicron Covid variant saw revellers abandon their plans at the last minute. Many restaurateurs and publicans worry that lost December spending will never be recouped, as cancelled Christmas parties do not tend to be rescheduled. The industry’s trade body, UKHospitality, has forecast the strikes will cost businesses about £1.5bn in lost sales and other knock-on effects. The organisation’s chief executive, Kate Nicholls, warned its members – who employ about 3 million people and operate 110,000 outlets – at the trade body’s annual shindig in London last week there were “extremely challenging times ahead”. She added that the “cost of doing business and the cost of living crisis” were creating a “perfect storm” for the sector. That storm will probably not go away any time soon. Many hospitality businesses – closed for months on end during successive pandemic lockdowns – entered the energy crisis laden with extra debt from Covid loans that they are still paying back. The industry is calling on the government to extend its energy bill relief scheme for business beyond the end of March. For now, it is hoping to have more information before revellers start arriving at venues for New Year’s Eve parties. The dark days of January and February usually bring a slowdown in trade to hospitality businesses, when many consumers see out the end of winter from the comfort of their sofas after the excesses – and extra spending – of Christmas. But many pubs, bars and restaurants expect the start of 2023 to be even more challenging than usual. Amid stubbornly high inflation and worries about an impending recession, many businesses dependent on consumer spending are fearful of a very bleak midwinter. If their tills did not ring as loudly as usual during the festive season, some may find it a stretch to pay their rent for the first quarter of the year when it is due on Christmas Day. In the face of rising costs from their suppliers, many hospitality venues have had to increase their own prices. Indeed, the higher cost of going out for a drink or a meal played the biggest role in pushing prices upwards in November, according to official inflation figures from the Office for National Statistics. All of this sets the scene for a tough balancing act for hospitality businesses over the next year. Many will want to raise their prices to cover higher costs, but will be asking themselves if making drinking and dining out more expensive also risks scaring customers away.