UK hospitality industry in 'catastrophic' situation says expert

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Prime Minister Boris Johnson confirmed capacity limits would remain in pubs and cinemas while nightclubs will stay shut until at least next month. UK Hospitality warned the one-month delay to the easing of restrictions could cost the sector around £3billion in sales. The association, which represents pubs, bars and restaurants, said it recognised the Government had a balance to strike but many businesses were already deeply in debt and needed greater levels of Government support.

Boss Kate Nicholls said: “Even now, with partial reopening, sector sales remain down 42 percent and 300,000 jobs remain protected by furlough. A one-month delay to restrictions lifting would cost the sector around £3billion in sales – but would also have a knock-on impact on bookings throughout summer and into the autumn.”

Meanwhile, offices will stay empty longer as the work from home advice remains in place. This will do little to help restaurants, cafes and other business owners.

Jonathan Neame, chief executive of brewer Shepherd Neame, said the delay meant about 15 of the group’s London pubs will be unable to open as planned next Monday.

He said the longer requirement for table service will push up costs when staff are hard to find.

He added: “Does this now mean we are at risk of new restrictions with every new variant? The only acceptable destination is full and irrevocable removal of all restrictions.” Michael Kill, chief executive of the Night Time Industries Association, said many members had spent their final cash reserves to be ready to reopen.

He added: “These businesses are overburdened with debt, so any decision to delay will make them heavily reliant on the Government to extend financial support and relief.”

Mr Kill warned the country would see many more illegal events take the place of businesses that are regulated as people express their frustration. Patrick Dardis, boss of pub chain Young’s called for 100 percent business rates relief – currently due to begin tapering off to 67 percent from July 1 – to be extended by at least four weeks.

The Treasury said: “The furlough scheme and support for the self employed is in place until September and eligible businesses will continue to benefit from business rates relief, VAT reduction and the Recovery Loan Scheme.”

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Comment by Kate Nicholls

A four-week delay to Freedom Day is devastating for pubs, bars, restaurants and other hospitality businesses which have been ravaged by this pandemic.

Thanks to the vaccine rollout, we were told that an end to restrictions was days away. A delay is a bitter pill to swallow.

More businesses are edging closer to the cliff edge. Come July 19, nightclubs will have been shut for almost 500 days.

Apart from costing the sector £3billion in sales, a delay will have a knock-on impact on bookings for this year.

Additionally, firms now face huge cost hikes, with business rates payments restarting and also higher employer contributions to furlough kicking in soon.

Hospitality has been the hardest-hit during the crisis, losing more than £87billion in sales.

Even now, after a partial reopening, sector sales are down 42 percent and 300,000 jobs are protected by furlough.

The Government must postpone business rates payments until at least October and extend powers which prevent operators being evicted from their premises due to rent debt.

If the Prime Minister wants businesses to get back to what they do best and drive Britain’s recovery, he must protect them.

• Kate Nicholls is CEO of UK Hospitality

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