The British Institute of Innkeeping (BII) has today released the results of their latest survey of members, detailing their experiences around reopening and the financial realities of trading whilst restrictions remain in place.
Whilst the vast majority of pubs across the UK have now been able to reopen and welcome customers back, they are still facing a huge number of issues as they try to rebuild their businesses. 74% of survey respondents are trading at less than 75% when compared to 2019 figures with trading restrictions, meaning they are loss-making or break even at best – not a sustainable position for any business.
Staffing continues to be one of the main challenges, with 53% saying they cannot recruit enough staff to cope with the additional workload created by Covid restrictions, and 35% say they have lost staff as soon as they have returned from furlough.
67% said that a lack of public understanding about the constantly changing rules and regulations for indoor vs outdoor visits has put more pressure on staff to effectively communicate and manage customer visits.
Debts from the pandemic
To enable their survival over the course of the pandemic and the months of closures for their pubs, nearly 60% have had to take a Bounce Back loan to survive and 24% still have unpaid rent debt that they are now also facing.
Almost 50% have pandemic specific debts of over £20k per pub and despite using their reserves, in many cases using their savings and borrowing from their own pensions, half of these have debts of between £40k and £80k per pub.
56% have said that they will need more than 2 years to repay the debts accumulated in the pandemic, and half of those will still be paying off those debts over a minimum of 5 to 10 years.
Without restrictions fully lifted, enabling them to trade freely and fully from 21st June, 11% of businesses will fail, 43% will be loss-making and will continue to take further debt, whilst 34% will only manage to break even with current regulations in place.
When thinking about support that they need in place for their businesses to remain sustainable as they trade again free of restrictions, allowing them to rebuild and recover, they highlighted the following:
82% say an extension of a full business rate reduction until April 2022 for England, in line with the other devolved nations, is necessary or business critical, whilst 89% say a full and fundamental reform of the rates system for pubs is needed to rebalance the burden with the digital economy and other sectors.
To support the strong trading they will need to drive their recovery 89% say that the current VAT reduction to 5% needs to be extended until April 2022, with the same number calling for a specific cut in duty for draught products in pubs.
60% say they need help from Government with the rent debt from the pandemic, with 66% calling for further support from their landlords. 70% say there is a need for further grant support to help them rebuild their businesses.
Steven Alton, CEO of the BII, commented:
“Whilst it has been fantastic to see many of our nations’ pubs reopening after months of closures, our members and their teams are exhausted as they try to rebuild their businesses, keep staff and customers safe, and adhere to all of the extensive restrictions, specifically placed on their venues.
“Without the full lifting of restrictions on 21st June, especially table service and social distancing, which render the majority of our members unprofitable, these viable businesses face at the very least an uncertain future, filled with years of debt repayments, and at worst, immediate business failure.
“We have taken our members voices to the heart of Government throughout the course of the pandemic, specifically highlighting the significant role they play in the economy, through employment and support of their local communities across the UK.
“Without real certainty of trading once again, free of restrictions, the vital role they are able to play at the heart of our nations’ recovery is in jeopardy. We are calling on Government to now deliver against its roadmap, allowing our pubs to begin their long road to recovery, before it’s too late.”