United We Stand

Debt enforcement moratorium still needed for hospitality sector, according to new poll

By Stefan Chomka contact

- Last updated on GMT

Debt enforcement moratorium still needed by hospitality sector restaurants bars Coronavirus

Related tags: UnitedWeStand, Restaurant, Coronavirus

A debt enforcement moratorium is still needed for the hospitality sector, with 88% of restaurant operators saying they are yet to agree any favourable rental terms with their landlords.

More than half of operators, (54%) said that their landlord had refused to offer any concessions, with an additional 34% saying that negotiations were ongoing, according to the latest weekly Hospitality Leaders Poll by MCA Insight/HIM.

The results highlight further the need for a debt enforcement moratorium, one of the key pillars of Hospitality Union’s original six-point action plan, to give both commercial tenants and landlords breathing space against litigation.

“Rent is the number one concern for reopening as if there is no relief then it will be impossible to stay afloat,” according to one respondent in the poll.

Government support on rent is expected to be discussed and finalised in the next couple of weeks, and a debt enforcement moratorium to be introduced imminently, according to BigHospitality​’s sister publication MCA​.

Now that the Government has passed “psychological moment” of its next phase announcement, rent discussions are expected to “pick up pace this week,” UK Hospitality chief executive Kate Nicholls told attendees at MCA’s The Conversation.

With the announcement providing some clarity on closure periods and which sectors will be subject to the greatest constraints, “it opens up the ability to talk in a sensible and pragmatic way about reaching a solution,” said Nicholls, adding: “But it will need to be legislative and it will need to be government backed.”

Rent remains a major concern for restaurant owners whose businesses remain closed under lockdown rules.

In an interview with BigHospitality​, Steve Holmes, CEO of Azzurri Group, which is behind high street restaurant brands ASK Italian, Zizzi, and Coco di Mama, says the company is still negotiating with its landlords.

“At the moment we are in a bit of a stalemate with landlords,” he says. “We need to find some way of dealing with each quarter rent currently rolling up so that we can at least make an operating profit until such times we return to some sort of normality.”

This is echoed by Jo Fleet, managing director of London-based steak restaurant group Flat Iron.

“Rent is one of the biggest considerations,” she says. “Looking at rents for the next nine months to a year is probably the biggest question mark at the moment.”

The weekly Hospitality Leaders Poll spoke to 500 founders or board level operators across restaurants, pubs and food to go. 

Related topics: Business & Legislation

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