UKHospitality: The hospitality hit
Kate Nicholls, chief executive of UKHospitality, welcomes the government’s roadmap – but believes more should be done to protect the sector...
The big news of the roadmap for the reopening of the sector seems to have been welcomed warmly by many. Within hours of the prime minister’s announcement social media was awash with people joyfully making plans to meet their friends and family for drink or a meal again. You cannot begrudge people some joy after the year that we have had and the roadmap for reopening is certainly a step in the right direction after months of negativity.
The plan for reopening has some major potential pitfalls for us in hospitality, though. Without wanting to seem like it is all doom and gloom, there is still a real worry that, unless we get a serious package of financial support at the budget, more businesses will fail before they have a chance to reopen.
We must look at it like this: hospitality is going to be operating under severe restrictions until 21st June at the earliest. The lifting of the working from home guidance does not look like it will happen before then so offices and city centres will remain subdued. That date is still a long way off, assuming we do see a return to normality then and not later.
In the meantime, venues will be initially restricted to outdoor opening only, which rules out at least 60% of the sector. When indoor opening follows, on 17th May, there will still be substantial restrictions in place. The flow of business through to suppliers and caterers is clearly going to be stifled for a good while.
In fact, the hit to hospitality further down the supply chain has been acute, despite the fact that it has not hit the headlines in quite the same way as pubs, restaurants and hotels have. The support unveiled in the budget must be bold, expansive and enough to see the entire sector, from top to bottom, through until restrictions are lifted. Across the wider supply chain, one in five jobs have already been lost and another 324,000 are now at risk of being lost unless there is immediate financial support. A third of businesses have not received grants and the sector is clinging on.
We are reliant on the supply chain for our survival. If these businesses fail, then the whole sector stalls. If we truly expect our sector to be in the vanguard of economic recovery, then we have to have a strong base.
Our attention is now firmly on the budget which is only days away. There can be no question about the chancellor confirming support for us. For starters, the VAT cut and business rates holiday must be extended along with an extended and targeted furlough. This must apply right through the sector and include event and conference centres, catering firms and everything else. We also need action to give businesses breathing room to deal with the mountain of debt that many have unfortunately built up over the year.
Asking businesses to start paying this money back when they are not even open could be terminal for many right at the moment when the government, and customers, are expecting them to fire up again.