Government called on for enhanced support for hospitality sector

Speaking on behalf of the UK’s hospitality sector, Kate Nicholls, UKHospitality chief executive, gave evidence outlining the problems being faced by hospitality businesses hit hard by the Coronavirus crisis.

Nicholls highlighted a number of areas where Government support was not having the intended effect of supporting businesses, with many in the hospitality sector struggling to access support and others excluded from schemes.

She said that some hospitality businesses had been frustrated by the loan scheme, citing a survey conducted by UKHospitality of its members that found that while 50% of businesses had applied for a loan, only 18% of those had secured one, with 58% of applicants still awaiting a response.

She also highlighted the need for business support to continue past end of the lockdown if the hospitality sector is to fully recover.

In her address to the committee, Nicholls said that despite an extension to the Coronavirus Job Retention Scheme, an estimated 350,000-500,000 hospitality workers are still missing out, either because they are seasonal workers or because they have been hit by technicalities, including new starters and those unable to produce a payslip

In response to the Government’s Grants Scheme she said that 71% of hospitality businesses had venues with a rateable value of above £51,000 threshold and were therefore ineligible for a grant.

She also called for a rent moratorium to allow businesses to focus on paying suppliers and said that businesses required a lead time after reopening before beginning to replay rents with a repayment schedule needed.

Serious damage to the sector was expected when rents are next due without an extended moratorium, she said.

“Government support for businesses has been swift and it has helped many businesses get over the initial shock of the crisis,” said Nicholls.

“It is clear, however, that too many businesses are struggling to access support and that the schemes in place must be extended and enhanced.

“Hospitality was the first sector to be hit hard by the crisis and it will be one of the last to make a recovery. Even when lockdown measures are lifted, our sector faces a huge challenge in getting customers back through their doors and finding solutions to social distancing measures that are likely to be in place.

“Business support needs to be boosted immediately to make sure that every business that needs it can access it. Scrapping thresholds for grants and support with rents will keep businesses alive and keep jobs open.

“This support then needs to be carried over after the worst of the crisis has passed. If it is abruptly switched off, then all the good work that has been done during these difficult weeks will be undone.

“Hospitality is going to be battling with the effects of this for months, if not years and support from the Government cannot be stopped until businesses are back up to full strength.”