After the Second Lockdown, What’s Next for the UK Hospitality Sector?

By Kunal Sawhney, CEO of Kalkine (www.kalkine.co.uk)

The broad range implications of the coronavirus pandemic have hit almost all businesses and sectors.While some industries have suffered a wholesome loss, a few sectors have done exceptionally well.Travel restric- tions within the state and overseas to curtail the spread of Covid-19 (SARS-CoV) has made the hospitality sector vulnerable.With the imposi- tion of the second lockdown that too around the festive season, has put the industry and millions of jobs at risk.

IMPACT OF MINIMAL-TO-ZERO BUSINESS

Blocking non-essential travel for a month seems to be easy as an order but has fierce-than-expected consequences. It hampers the full-length func- tioning of the hospitality sector including the remunerations of employees, functioning of small-scale enterprises supporting the large businesses in various forms, hoteliers, pubs, restaurants, bars, nightclubs, recreational areas, transport aggregators and local dwellers whose businesses are largely dependent on the number of footfalls.

The hospitality firms and the people employed with them gradually start- ed their operations from July-August after the government eased a set of restrictions allowing travel within the state and also a few international routes. But the second lockdown has added to the panic within the sector.

The UK hospitality sector that had a turnover of more than £130 billion, as per the trade body UKHospitality, is now trickled down to do just £80 billion. Notably, the trade association has arrived at a figure of £80 billion without factoring in the losses that would be incurred by the industry due to the second lockdown.

Many other independent trade lobbies have strongly condemned the deci- sion to impose the second lockdown in the United Kingdom at a time when all hospitality firms are trying hard to recover a proportion of partial losses suffered during the early days of strict lockdown.The merriment environment around Christmas and the year-ender holiday period has been considered as one of the best suited times for the hospitality sector with the commerce point of view.

The UK hospitality sector has been in a very skittish position so far this year. Last month, UKHospitality CEO Kate Nicholls had warned that the

By Kunal Sawhney, CEO of Kalkine (www.kalkine.co.uk)

second lockdown would be devastating and had raised concerns about the small and medium enterprises, which have already lost a huge chunk of their respective earnings and are operating on fingertips to avoid closures.

BUMPY RIDE TO CONTINUE?

There is a definite likelihood that the business of the hospitality sector will be affected in the near future. Meanwhile, the UK government has also extended the validity of the furlough scheme that intends to protect the rights of employees who are not able to draw a regular income from their employers or have been laid off.

However, it can be argued that how it will assist the hospitality sector as most of the businesses were unable to realise a moderate proportion of sales even with the lower restrictions along with a series of retrenchments.

The government backed “Eat Out to Help Out” scheme that has already been withdrawn did seem to have helped several eateries and non-premier restaurants. But a large section of owners and employers are yet to see a meaningful rise in the earnings to sustain their businesses as there has not been a material stimulus package or a dedicated support system from the government’s end.

A government-aided relief package of moderate quantum or a set of pre- emptive catalytic support measures can serve as a temporary fix for the ail- ing sector until the lockdown persists. However, the bitter truth of lower-than-expected sales has to be digested by the firm owners, but the government can surely step up to ascertain and minimise the number of business closures, thereby, safeguarding the income of millions of UK households dependent on the hospitality industry.

 

After the Second Lockdown What’s Next for the UK Hospitality Sector?, After the Second Lockdown, What’s Next for the UK Hospitality Sector?