A new survey of UKHospitality members, found that resolving the rent debt issue is critical to ensuring the future health of a sector that pre-pandemic accounted for 10% of UK employment.
As part of its submission to the Government’s call for evidence, UKHospitality highlighted that more than half of operators surveyed said they have not had a rent reduction from their landlord, despite prolonged periods of closure and over a year of punitive trading restrictions.
The analysis also revealed that 52% of respondents have not been given any extension to pay rent, that 73% are either unable or don’t know how they can pay their rent arrears and that 40% have not been able to reach a deal with their landlord over rent concessions.
Protections that prevents landlords from repossessing commercial premises if businesses cannot pay their rent as a result of the Coronavirus pandemic have been extended a number of times since first introduced, but are now set to expire at the end of June.
If the current protections that are in place are removed this summer, the analysis estimates that a sixth of the remaining hospitality workforce, equivalent to 332,000 jobs, could be lost.
This would be in addition to the hundreds of thousands of jobs already lost during the course of the pandemic.
“Our survey shows that while a proportion of operators have been able to strike a deal with their landlords on payment of rent debt, for many there have been no concessions and little engagement on the issue," says UKHospitality CEO Kate Nicholls.
"The issue of rent debt must be resolved in a way that shares the burden as businesses simply cannot be expected to pay their rent arrears in full."
Nicholls is calling on the Government to take affirmative action to help hospitality rebuild and play its part in the economic recovery.
"There has to be a sharing of the pain caused by lockdowns and trading restrictions," she continues. "Government must extend and expand protections until the end of the year, and force the writing off of a fair amount of Covid rent debt.
"The removal of protections would be disastrous and result in a huge increase in enforcement activity – meaning business failures and hundreds of thousands of jobs lost.”