By Kunal Sawhney, CEO of Kalkine (www.kalkine.co.uk)
The severely disturbed hospitality industry is again under the doldrums of renewed Covid worries following the emergence of the Omicron variant of Covid-19 (SARS-CoV-2) virus with a number of countries including the United Kingdom strengthening the border control measures as a large section of people remain vulnerable to the rapidly mutating virus and sub-lineages.
The concerned healthcare authorities are examining the nature of mutations, the prospective effectiveness of existing vaccines against the Omicron variant and the potential extent of damage it can cause in the health conditions of a person after contraction.
Almost all of the businesses operating within the hospitality industry in the UK have not experienced revenues close to the pre-Covid levels as operative difficulties continue to hurt the critical functions, at a time when they have to prepare themselves for the upcoming festivities and year-ender holidays.
The enterprises were already engaged in managing the operational hardships including the acute shortage of human capital with the businesses under the food and accommodation sector feeling the intense heat of short-staffed operations.The consumer facing businesses certainly require an adequate number of people who can oversee a number of essential functions and responsibilities that collectively help in smooth running of the enterprise.
Starting with the proper number of chefs, to the professionals who can prepare special cuisines at a multicuisine facility and people serving & preparing quick snacks and drinks at bars, pubs, nightclubs and beer gardens.With the dearth of staff at hospitality settings, most of the businesses were unable to operate at the full functional scale even after deploying maximum resources as many enterprises struggle to hire skilled workers for specialised tasks, at a time when the number of vacancies hover at all-time highs.
Along with these challenges, the businesses are grappling with the faltering supply chain and logistics systems, as a result of which commercial setups have to face untimeliness of orders and material delays in the supplies of essential raw materials.With the persistently higher input prices due to aforementioned factors, businesses are now increasingly transferring the cost burden to the consumers in order to reduce their losses.
With the arrival of the Omicron variant and the subsequent warning of severe consequences by the World Health Organisation (WHO), people have certainly turned more apprehensive as the virus is also affecting the individuals who have completed the two-dose regimen. Businesses that have received multiple bookings for the Christmas celebrations and other slots during the pre-Christmas period and year-ender breaks are facing cancellations as people remain worried with regard to the transmissibility and nature of the new variant.
The reintroduction of the mask mandate in the UK by the government from 30 November has also increased the worries.These counter-protective measures are aimed to contain the spread of the new variant in the country, while, on the other hand, such social distancing norms make it very hard for the enterprises when it comes to serving a large gathering in a closed space.
With the biggest festive season approaching, enterprises under the hospitality industry have been preparing themselves for the Christmas period as initially they anticipated that this year, people would be able to celebrate the festivities without any restrictions for the first time after 2019. But, the situation has turned upside down with the advent of the new variant.Things have become murkier after the bosses of certain vaccine makers have expressed a dilemma over the effectiveness of vaccines on the Omicron variant.
People responsible for organisation large gatherings are exploring the situation whether to go ahead with the planned schedule of events or to drop or defer the get togethers to a later date as the recently introduced targeted measures by the Downing Street administration will be reviewed after three weeks, alongside the assessment of Covid activity after the corresponding period.
The euphoria with regard to the Christmas festivities is higher as people managed to celebrate the auspicious occasion under severe restrictions, the tier system imposed by the government, restricted domestic, as well as international travel, stay at home advisory and the stern restrictions due to massive outbreak of cases. Earlier last year, the daily rate of infection and hospital admissions surged to new highs with the people contracting the virus increasingly seeking medical intervention.
As far as the commercial operations of hospitality businesses is concerned, Christmas remains the most happening period in terms of trading and the quantum of business as individuals remain in a mood to step out, spend, travel, gather and celebrate in big numbers.The hospitality operators are fearing the loss of trading due to the arrival of the Omicron variant as a second consecutive disruption in the Christmas period would substantially impact the overall earnings and the subsequent profitability.
The businesses with broken balance sheets were anticipating a sharp turnaround in the quarterly trading due to Christmas. Due to the unavoidable consequences of the Omicron variant, restrictive environment and the resurgence of social distancing guidelines, the hospitality sector has been apparently derailed from the path of recovery.The tighter border control measures, stern self-isolation guidelines and increased number of countries in the UK’s red list for travel, the number of international visitors will contract further.
Not only this, the overseas traffic from the countries in amber and green lists is expected to shrink in the upcoming weeks as individuals and households are contemplating the situation with a bunch of European nations announcing mini lockdowns. People have experienced the unforeseen misfortunes of flight cancellations, as well as indefinite delays due to restrictions in the international borders.