Giving evidence to the House of Commons BEIS Committee, UKHospitality Chief Executive Kate Nicholls has highlighted the need for further significant support for hospitality following the impact of the second national lockdown, along with urgent clarity on the tier system businesses will enter upon reopening.
Even with the prospect of the end of national lockdown this December, restrictions have already had a devastating impact on businesses in what would have been for many their most profitable quarter - with some operators banking as much as 40% of their annual profits between Halloween and January.
This comes at the end of a year which has seen the annual turnover of the hospitality sector drop by 40%, over 600,000 job losses and business confidence plummet.
On leaving lockdown, Nicholls said to the committee venues have had precious little time in which to digest and implement the rules that the Government is introducing.
Nicholls said, ‘’It is imperative that businesses are given the maximum amount of time ahead of reopening, to prepare for the tier that they will be entering. This needs to be transparent and clear, with clear guidance available for moving between the tiers. We also require detailed guidance on the restrictions.
'Over recent measures, hospitality businesses have had 6 different changes on the conditions under which they can operate in the last 8 weeks. This puts pressure on all businesses, but particularly SMEs in the sector. We need to know for certain what we will be facing over Christmas and New Year.‘’
Nicholls added, “Businesses never really came out of lockdown one. Stringent restrictions were already putting the sector below breakeven point. Hospitality has gone from a precarious situation to being back into intensive care during this November.
'UK-wide, UKHospitality estimates that sector cash burn during lockdown will be close to £500million. Without more support, the impact of this lockdown will be even more severe than last time.’’
On support for the sector, Nicholls spoke of the need for continued support through 2021. Key areas of support for the hospitality sector are a Rent Moratoria Extension, VAT reduction extension beyond March, emergency clarification of CJRS Bonus black hole, realistic grant support that reflects the true cost of closure and support on state aid limits.
On rent, Nicholls said, “Extending the rent enforcement moratoria until June 2021 will prevent businesses being wound up and mass job losses when the current moratoria end. It isn’t sustainable to think that businesses will be able to pay a full year’s rent in 2021.
'There is a vested interest on all sides to avoid the devastation of the high street. Government should be prepared to incentivise forgiveness of rent debt and work with all stakeholders for a resolution.’