No restrictions (yet) and no help for stricken hospitality sector

By Joe Lutrario contact

- Last updated on GMT

No restrictions (yet) and no help for stricken hospitality sector

Related tags: Coronavirus, Kate nicholls, ukhospitality

The Government is unlikely to introduce additional Covid restrictions before Christmas but has warned that further measures remain on the table and that data will be reviewed ‘by the hour’.

Following the two-hour cabinet meeting, the Prime Minister has been accused of failing to follow scientists’ advice on the need for immediate restrictions and for continuing to leave hospitality in limbo. 

Businesses are facing a huge drop in business over what is traditionally one of the busiest trading periods of the year as customers follow official advice to reduce social contact with no new Government support. 

Measures on the table included a ban on indoor dining and even the return of curfews. While many in hospitality will be pleased that the Government has not opted to introduce further restrictions, others would have welcomed them so long as they came with fresh support, including the return of the furlough scheme. 

The surging Omicron variant has already forced many businesses to shut up shop early for Christmas,​with London particularly badly hit by the drop in consumer confidence caused by the Government’s introduction of Plan B measures. 

New figures from trade body UKHospitality show that December is set to be 'a disaster' for a sector which had much riding on the festive trading period. 

Over half (54%) of venues were down more than 40% in revenue last weekend, with one in five businesses reporting a crushing sales drop of more than 60%.

On top of this, 88% of operators say they feel negative about the potential of New Year’s Eve trading and four in five operators have already experienced cancellations for bookings in what was already set to be a quiet Q1 next year.

Meanwhile a separate survey from the Tourism Alliance showed that a third of pubs, bars and restaurants have no cash reserves and 10% of pubs and 14% of restaurants are therefore very likely to fail, with consequent job losses.

Without any form of Government support a further 40% are at risk of failure. Accommodation businesses are only slightly more resilient with 22% reporting no cash reserves – 47% with less than 2 months’ worth – with 26% at risk of failure in the next year without further support.

Last week, chancellor Rishi Sunak made it clear that - for now, at least - there will be no extra money or relief.

“Hospitality operators desperately want to keep their doors open and trade their way to recovery, particularly during the Christmas period, which is not only key for balance sheets but for the communities and people our businesses serve," says UKHospitality chief executive Kate Nicholls. 

"However, these catastrophic figures clearly show that trading levels are now so low that without Government support many businesses will not survive into the New Year and jobs will be lost. Cancellations have annihilated cash reserves."

“The industry urgently needs grants for short-term business survival and an extension to business rates relief and the lower VAT rate to secure longer term survival and planning. It is also crucial that the Government lets the industry know as soon as possible if measures are to be imposed and what they might be, to allow for as much damage limitation as possible.”

Related topics: Business & Legislation

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