Spabreaks.com boss warns on cost threats to start-ups as small firms ‘hurting’

The founder of Spabreaks.com has warned over the threat to UK entrepreneurship from soaring wage costs and an uncertain outlook ahead of this week’s spring statement as she said UK firms were “hurting”.

Abi Selby, who co-founded the spa booking website 17 years ago, said the Government is risking putting start-ups off from launching their own businesses in the UK as they face a barrage of costs.

Next month will see firms hit by a rise in national insurance contributions (NICs) and the minimum wage increase, both of which were announced at last October’s budget, as well as rising business rates.

Ms Selby told the PA news agency: “Small businesses generally are really hurting.

“There’s a lot of nervousness from start-ups.”

Ms Selby made a plea to Chancellor Rachel Reeves ahead of the spring statement on March 26 to “try to maintain some positivity” and help encourage start-ups and people “who are hungry for business”.

“It scares me that there’s a lot of people not going into business as a result of what could likely happen.”

Firms have been warning over job losses and price hikes as they look to try to offset the incoming hit from the budget measures, which come at a time when the wider economy is also flagging.

Official figures last week showed the economy contracted by 0.1% in January and the Organisation for Economic Co-operation and Development (OECD) last week slashed its outlook for the UK economy this year and next.

Ms Selby said consumers were also feeling under pressure, with Spabreaks.com seeing customers becoming more cautious and booking at the last minute, sometimes a week or even just a few days in advance.

She told PA: “It’s a lot to do with a changing mentality, with people saying ‘let’s see how much I’ve got left’ before committing to spending.”

The group saw a marked shift towards more affordable, shorter spa bookings in 2024 as people wanted to treat themselves more frequently but for less money.

This helped the firm notch up a record year, with sales reaching over £35 million and total bookings up 24% versus 2023.

The group is now plotting its overseas expansion with its sights set on Europe first, possibly in 2026 or 2027, followed by Dubai and the Middle East, with the US also a possibility.

But it needs to first have the technology and systems in place to allow it to operate seamlessly across other countries, with aims for this to be ready by the end of this year or the beginning of 2026.

“I’m keen to branch out and expand our customer horizons,” said Ms Selby.

She said the outlook was looking solid for wellness spend, despite ongoing consumer belt-tightening.

“Wellness is not going away, but affordable and accessible wellness is really very important,” said Ms Selby.