The industry body is calling for the Scottish Government in Holyrood and central Government in Westminster to work together to ensure businesses receive the financial support they've been promised, adding that much of the funding has yet to come through.
A trading update from SHG members - which comprises a number of the country’s largest independent hospitality operators including The DRG Group, Buzzworks Holdings and Signature Pubs - showed that trading was down 80% during the vital Christmas trading period last month compared to the year before.
On average members lost £12,000 of revenue per week, per premises.
The SHG says the massive cut in takings will impact payments for property rent, utilities and equipment rent until at least the summer, affecting suppliers, investors such as pension funds, and others who depend on the industry.
It also throws into doubt existing plans for £30m of investment in 27 member premises, which, the group adds, would create hundreds of new jobs as well as protecting existing ones.
With Scotland now back in lockdown until at least the end of January, Scottish hospitality businesses are reportedly spending nearly £6,000 per week per premises on fixed costs and contributions to the furlough scheme.
However, the SHG claims much of the promised financial support designed to help businesses through the shutdown has yet to come through, adding that it is unclear even what businesses are entitled to due to conflicts between the Holyrood and Westminster governments.
“Without Christmas, when we earn around 30% of our entire annual income, most hospitality businesses just aren’t viable," says Stephen Montgomery, spokesperson for SHG.
"We’ve had the worst December’s trading in living memory and we’re facing the worst start to a year ever. Instead of helping, our political leaders are squabbling with each other. It’s like arguing about who throws the lifebelt when someone’s already under water.
“The continued furlough scheme is welcome but it’s there to protect jobs rather than businesses, and we still have to pay all sorts of fixed costs.
"Even those businesses that survive will seriously struggle to recover this year. Not only is the support completely inadequate, in many cases what little is available hasn’t appeared months after it was promised.
“We will soon be proposing specific, realistic measures that both governments can introduce so we’ve got a fighting chance of getting back on our feet by next year.
"First of all though, we need them to grow up and start working together so that the hospitality sector still exists to drive our economic recovery once the virus is under better control.”
In December the Scottish Government pledged a £104.3m package of support for tourism and hospitality, which will include £19.2m used to provide one-off grants for hospitality businesses.