Counting the Cost of the Road to Recovery

Covid restrictions may have ended in England but hospitality businesses in Bristol say the road to recovery remains a long and challenging one.

The Bristol Hoteliers Association (BHA) says soaring costs and recruitment are their biggest threat as they seek to return to ‘business as usual’ post-pandemic.

The BHA is once again calling on the Government to reconsider its plans to return VAT for the hospitality sector to normal levels from 1 April in order to give their businesses a badly-needed helping hand.

BHA Chairman Raphael Herzog said: “We hope that the recent lifting of Covid restrictions in England will give people the confidence to return to hotels, particularly for conferences and larger events.

“But while we welcome the removal of restrictions, we still face many months of difficulty as we try to balance the books.

“There are significant price rises facing us; some food and beverage suppliers have increased their charges by 20 percent, we’ve got increased wage bills and demands to cater for, all with very little money coming in.

“And, of course, energy is a massive challenge, and the only way we can effectively deal with soaring energy prices is through a combination of reducing our consumption and, sadly, increasing our own prices.”

Many BHA members reported that business was at least 30 percent lower in November and December 2021 than they had hoped for, and there are no signs of any significant upturn in 2022 so far, with January and February business at a much lower level than in 2019, but with much higher costs.

Mr Herzog said the end of restrictions is outweighed by the increasing costs and appealed to the Government to reconsider the decision about ending the reduced rate of VAT for hospitality businesses.

In July 2020 the Government announced a temporary 5% reduced rate of VAT for the sector. This was increased to 12.5% in October 2021 and is due to return to 20% on 1 April.

Mr Herzog said: “We are urging the Government to extend the reduced rate of VAT at least until the end of the summer in order to give us a proper chance of sustaining our businesses. Ideally, we would like the reduced rate to be made permanent.

“It is extremely hard operating a hospitality business in the current climate, with more money going out than ever, and that’s before the energy price rises hit us as well as big rises in the minimum wage and living wage.

“We have all made significant investments in making our premises as Covid-safe as possible and now that restrictions have been lifted, I hope companies will look to bring their teams back together for meetings, conferences and events in our venues.

“We need the support of local companies, as much as we need help from the Government, if we are able to realistically get our businesses fully onto the road to recovery.”

He added: “Many hotels are really working hard to offer a much better work life balance than other industries as well as very competitive wages with bonuses and incentives.

“We hope this will encourage more people to choose to start their careers in hospitality, which is a vibrant and enjoyable sector which offers so many exciting career opportunities.”