Bosses from leading UK restaurant and bar groups including Burger King, Wahaca, D&D London, Hawksmoor, JKS Restaurants, Harts Group, Gordon Ramsay Group, Dishoom and Living Ventures have signed a letter to the Treasury calling for a rent-free 'National Time Out' period.
Under the proposal, called #NationalTimeOut, hospitality, leisure and retail businesses will be given a nine-month rent holiday to provide them with some respite during the Coronavirus pandemic.
It is hoped such a move will help safeguard some of the 3.2 million jobs in the hospitality sector that are currently under threat because of the Coronavirus virus and the UK lockdown. Without some extraordinary measures, it is estimated that more than half of hospitality businesses and as many as two million jobs will not survive.
London Union’s Jonathan Downey, who is behind #NationalTimeOut, says it is essential that the hospitality sector gets support to ensure many of its businesses have a future.
“So many in our sector are going to need something extraordinary to get through the next few months and to make it worthwhile to carry on afterwards,” he says.
The proposal, which is laid out in the letter to the Government, won’t cost the taxpayer a thing, says Downey, and is instead a solution that allows businesses to work through the next nine months towards a bounce back and without the need for another Government handout.
The signed letter proposes that the #NationalTimeOut would push back the next nine months/three quarters of rent (April-December), so that nobody pays anything until Q1 next year, when rental payments start as normal again.
Each corresponding lease is extended by nine months (if the landlord agrees/elects) so that those payments aren’t lost, just postponed to the back-end.
To help landlords bridge the cashflow gap from three quarters of no rent, it would also enable the same push back for them on the next nine months of their loan repayments (where the debt is secured on premises benefiting from this rent postponement).
The proposal includes other protections and support for landlords, including easier/enhanced access to Coronavirus Business Interruption Loan Scheme (CBILS), ensuring that service charge and insurance is still be paid so that premises can be maintained/safeguarded, and no penalties for postponed payments and others.
Like the 12 months business rates break, the measure should be sector specific - applying only to those businesses that have been forced to close by Government order, will be last to reopen and will take the longest to get back to any kind of normal - namely hospitality and leisure, it concludes.
The move is significant following the announcement by the Government that restaurants, pubs and hotels will be among the last businesses to reopen when the Government begins relaxing its Coronavirus lockdown orders, making hospitality one of the worst hit sectors.
Hospitality businesses have warned that even when restaurants and pubs are allowed to open, many will be hit by a fall in trade caused by social distancing measures and a drop in tourist numbers and will fail to survive without some form of support as a result.
David Abrahamovitch, co-founder and CEO of London coffee and restaurant business Grind, says that re-opening under social distancing conditions likely won’t be viable for the majority of Grind's estate.
“Our models just don’t work without significant footfall. Most restaurant businesses can’t survive a 10% drop in customer numbers let alone a 50% drop.
"There’s no point reopening if you’re just going to lose money.”