Unless the Government provides fiscal support to overcome the stand-off between landlords and tenants over unpaid rent, hospitality business failures and significant job losses will follow, according to UKHospitality.
The trade body has written to the Chancellor of the Exchequer and the Secretaries of State at BEIS, DCMS and HCLG, warning that hospitality businesses hammered by COVID-19 and facing difficult trading for the foreseeable future, will be unable to come to rent settlements without support.
UKHospitality has warned that, unless financial support is forthcoming, the reopening of hospitality businesses after months of lockdown will be at risk. Its letter sets out measures to resolve the deadlock, including the possible introduction of: tax credits to incentivise rent waivers, property bounce back bonds to cover lost revenue form the closure period, and the introduction of a furloughed space grant scheme. The trade body has also reiterated its willingness to work with all parties to help deliver an equitable solution and support for the proposed Code of Practice to facilitate negotiations.
UKHospitality Chief Executive Kate Nicholls said: “The stalemate on rent, with the June quarterly rent day fast approaching, is the biggest threat to the recovery and future of hospitality.
“We are moving towards the reopening of the sector and many people, both in and out of hospitality, are keen to see businesses open again. Unfortunately, all the good work in keeping businesses afloat during lockdown and the best-laid plans for restarting, could be completely undone by the impasse on rents.
“As things stand, when 24th June comes around, many businesses will not be able to pay. We have lost an entire quarter’s revenues to COVID-19 and the prospects for trading from July to September look severely limited. Social distancing measures and expectations of low consumer confidence are going to see businesses trading at a fraction of capacity.
“The current moratorium on forfeiture and enforcement action must extended until the end of the year, to allow Government’s proposed Code of Practice to support negotiations. The reality is, though, we are at a point where the Government has to step in and act decisively, otherwise businesses will go under, jobs will be lost, and rent will never get paid.
“Fiscal support is now the only option if we want to avoid business failures. The Government must consider supporting hospitality businesses who cannot pay rent. A continued stand-off does not help anyone.”