We’re now more than six months on from the fateful day in March when PM Boris Johnson mandated that all hospitality venues should close, followed in quick succession by a nationwide lockdown, writes Mike Berry. The drastic government response to the pandemic left business in the sector (and those that supply it) in a state of paralysis, wondering how to protect the jobs they support and survive the months ahead to reopening.
The Government’s immediate package of business support helped to save the vast majority, through the much-heralded furlough scheme, moratorium on rent, tax deferrals, rates holidays and the various loans and grants schemes.
Then came the ‘Grand Reopening’ in early July as businesses once again threw open their doors to welcome guests back, albeit having invested heavily to meet stringent Covid-secure guidelines and operating with reduced capacity because of social distancing. Not ideal, but at least there was revenue going through the books.
August’s unprecedented Eat Out to Help Out Scheme and a targeted VAT cut provided a much-needed consumer stimulus and confidence boosts, with operators reporting record sales and busy venues once again. The sun shone and, for the most part, and it felt like a degree of normality had returned. Operators could perhaps glimpse light at the end of a very long, dark tunnel, notwithstanding the parts of the sector still not permitted to reopen, such as nightclubs and other late-night businesses, or venues that don’t serve food.
Shift in mood
Barely a month later and the mood could not be any different. The sector faces bleak times ahead. New curbs have put a curfew on trading hours, the end of furlough is in sight, there is still no roadmap to reopening for the late-night sector, plans to restart business events have been shelved, workers have been told to remain at home and the Government has again warned of a further tightening of restrictions if these measures don’t help to control the spread of the virus. Bleak indeed.
Step forward the Chancellor Rishi Sunak once more. A new economic plan to protect jobs through the winter and beyond has just been announced. Hospitality had high hopes – surely with these new restrictions in place there would be targeted support, helping the businesses most affected?
Sadly not. A two-month extension to the VAT cut, specifically for hospitality and tourism businesses, until 31 March is barely a crumb of comfort. Some elements of the Chancellor’s plan are welcome, but do not go nearly far enough to help save the estimated one million jobs at risk across the sector. It seems inevitable now, with the vast majority of firms trading sub-optimally and with consumer confidence and footfall hit, that there will be widespread job losses in the very near future. This was a missed opportunity.
Part of the solution
So where do we go from here? UKHospitality has urged the Chancellor to engage with the sector on specific measures that will keep people in work. It seems non-sensical that additional support for those businesses mandated to close early (on questionable evidence) and through no fault of their own, should not be forthcoming.
Media coverage and social feeds over the weekend were full of images and video of people congregating on the streets and cramming into off licences once they were required to leave hospitality outlets at 10pm – surely doing more harm than good. This is a point that many sector leaders have been at pains to make, calling for the policy to be urgently reviewed.
Longer-term solutions are still required to solve the issue of rent debt and fragile tenant-landlord relationships. An extension to the business rates holiday and VAT cut are an absolute necessity. The night time economy must be supported. Hospitality can be part of the solution through this crisis, providing responsible and regulated environments, supporting track and trace and keeping people safe while enjoying themselves.
Over the past six months we’ve heard from many politicians about the importance of the hospitality sector to the nation’s economic and social wellbeing. These warm words will count for nothing unless they result in concrete action. If not, the alternative is too grim to consider. What we need now is for as many senior industry leaders to step up and be visible and to campaign for the support our sector needs – as my colleague Mark Stretton states – we need to go again.
Mike Berry is Head of Content at Fleet Street Communications and former Managing Editor of the Morning Advertiser