Hotels, restaurants and pubs expect more than a third of their bookings to be cancelled this month.
The trade body UKHospitality said it expected planned rail strikes to cost businesses about £1.5bn in lost sales and other knock-on effects, with a lack of a breakthrough deal pushing up expected cancellations to 35%-40% from 20%-30% at present.
Research from Barclaycard this week found that 45% of the public are planning to scale back on parties and socialising this year because of financial pressures.
