Hospitality Sector Call for Support as Cancellations Mount

Hospitality businesses, particularly pubs and restaurants are calling for support from the Government as the spread of Omicron and health warnings create havoc on the sector.

England’s chief medical officer Professor Chris Whitty yesterday (December 15) advised the public to consider cutting back socialising around Christmas, while Prime Minister Boris Johnson said people should “think carefully” before going out to celebrate.

UKHospitality boss Kate Nicholls has made a plea for business rates relief and VAT discounts to be extended, warning that the sector has been hit harder than expected by the new restriction, adding that hospitality sales have already plunged by more than a third over the last 10 days with £2 billion of trade already lost in December.

Ms Nicholls said: “It is quite clear that the impact of the current guidance and restrictions has been more hard hitting on an already beleaguered hospitality sector than expected.”

She added: “It is imperative that local authorities release the discretionary grants and rate relief they have to affected businesses immediately and VAT and rate relief support is extended and not turned off prematurely.”

Firms across the sector have repeatedly asked for an extension of the discounted 12.5% VAT, which is due to revert back to the original 20% rate in March next year, with UKHospitality also pushing for a postponement of business rates.

She said the group was working with the Treasury and across government to help ensure support is maintained for the sector.

The CBI has also urged the Government to move quickly to restore confidence amid the rapid spread of Omicron.

The CBI has identified a series of actions to be taken immediately and in future to ensure the UK is well-equipped to deal with variants of concern. One example of immediate action includes ramping up the ‘test before you go out’ message as people see family and friends over Christmas.

Principally, while businesses are keen to see a roadmap out of plan B in January, should further restrictions be required to protect public health firms will want the maximum amount of time to prepare and adapt.

And, with firms’ ability to trade their way to recovery, particularly in the usually lucrative run up to Christmas, hampered by government measures and messaging, the CBI makes clear that ministers must provide support in lockstep with future restrictions. Specifically, distributing unspent grants can be done now to alleviate firms hit hardest. If restrictions persist following the January 5 review date, then further business rates relief and other help to reduce fixed costs should be on the table, the CBI said.

Greene King CEO Nick Mackenzie said some its London pubs have seen sales down as much as 70% compared with the same week in 2019 amid a wave of cancellations.

He said: “The guidance from Government to limit social interactions and shift to working from home has put our industry into lockdown in everything but name.

“As consumer confidence plummets and booking cancellations rise, we urgently need Government to act to support the industry now by freezing business rates and removing the existing cap, confirming a longer term reduction in VAT and providing targeted support for those most severely affected by the current situation.

“This will help to continue to preserve livelihoods and jobs in our sector.”

Earlier this week, the International Monetary Fund said Chancellor Rishi Sunak should be “ready to deploy” a mini form of furlough support in the event of widespread closures to help sectors suffering the most, in particular hospitality.

Rain Newton-Smith, CBI chief economist, added: “Further support for struggling firms will be needed if fresh government public health measures prevent firms trading their way to recovery.

“Cash is king, so helping affected firms with cashflow, by ensuring unspent local authority grants are distributed to firms, giving firms more headroom to manage their coronavirus debt repayments and considering measures to reduce the fixed costs of businesses where demand is severely affected should be on the table.”

Michelin-starred chef Michel Roux Jr took to social media to vent his frustrations, on Twitter he said: ‘My daughters restaurant has had over 300 cancellations in the last 2 days, gone from breaking even to a loss. @BorisJohnson @RishiSunak hospitality and the supply chain need help, this is deja vue March 2020.’

Michelin starred chef Tom Kerridge has also asked for a VAT to be reduced back down to five per cent for hospitality to protect restaurants that are struggling with the effects of rapidly spreading Omicron. Speaking on Sky News, Mr Kerridge said it was time for the ‘Government to step up’ and stop with ‘mixed messaging’ to ensure that hospitality venues and businesses get the support they need. He condemned the Government for being ‘reactive rather than proactive’ when it comes to putting support measures in place for those struggling due to the virus.