Quarter Of Hospitality Businesses Believe They Could Fail In Next Three Months Without Further Government Support

Trade bodies say sector is teetering on the edge following new restrictions announced by Prime Minister, which could result in 540,000 further jobs lost

Pub and hospitality trade bodies the British Beer & Pub Association, UKHospitality and the British Institute of Innkeeping have unveiled new findings today showing that almost a quarter (23%) of their members think their businesses will fail by the end of the year without further Government support.

The findings, from a survey of members of all three trade associations conducted by hospitality market research company CGA, revealed the high level of concern about the future of the pub and wider hospitality sector without further support from Government. This was before the latest restrictions for pubs, restaurants and the wider hospitality sector were announced by the PM earlier this week, including a 10pm curfew and table service only, which will only make the situation worse.

The survey also found that one in eight hospitality staff have already been made redundant, and that more sector jobs are expected to be permanently lost when the Government’s furlough scheme comes to an end in October. On average, businesses believe their workforce will be 25% lower by February 2021 compared to February this year – a decline of 675,000 jobs lost from the sector in a year.

Only 7% of respondents said they were feeling optimistic about the prospects of the hospitality sector over the next 12 months, down from 23% in August and 19% in July when respondents were previously asked the same question.

With such a gloomy outlook for the sector, exacerbated by the Prime Minister’s announcement earlier this week on further restrictions, the trade bodies have all called on the Government to take drastic action.

They have urged the Government to immediately put in place a new sector-specific employment support package and to extend the VAT cut and business rates holiday for the sector.

These measures, they say, will help pubs and hospitality businesses survive any further disruptions to their operations, enabling them to work towards a safe and sustainable recovery heading into 2021 and beyond.

Emma McClarkin, Chief Executive of the British Beer & Pub Association, said:

“This research shows pub businesses were already teetering on the edge. Now the Prime Minister has announced even more restrictions for them, it is clear much more support will be needed from the Government to ensure they survive.

“An immediate stimulus package is required for our sector in the form of an extension to the furlough scheme and business rates relief, plus continuation of the VAT cut to food and soft drinks and a significant cut to the UK’s excessively high beer duty.

“Only by taking these measures can the Government save our pubs, hospitality businesses and as many as 540,000 jobs. If the Government doesn’t act now it would be unforgiveable.”

Kate Nicholls, Chief Executive of UKHospitality, said:

“The future of the sector is still very much in the balance. Many venues have still have not reopened and those that have are operating at reduced capacity and a fraction of normal revenue. We have already had some high-profile casualties and far too many job losses.

“The additional restrictions announced this week place even further burdens on a sector that is operating with razor-thin margins and needs all the help it can get. It is vital that these restrictions are reviewed regularly.

“We need comprehensive financial support so that those businesses that survive the winter can begin to rebuild next year, starting with a package of measures to support short time working. The VAT cut for hospitality must be extended through 2021, as must the business rates holiday. We also need the government to step in now and help to deal with the rent debt that has built up over months of enforced lockdown.”

Steven Alton, Chief Executive of the British Institute of Innkeeping, said:

“This insight clearly reinforces the urgent need for a specific package of Government support for our sector, especially in light of the devastating impact of new restrictions both on trading and in severely damaging hard fought consumer confidence.  Government support in our sector is an investment which will deliver strong returns economically, with skilled jobs and allowing our venues to continue to be at the centres of their communities across the UK.

“Despite the immense fragility of their own businesses, 23% of respondents still see playing a key role in their communities as a top priority.  We have fully played our part in this pandemic both in successfully delivering extensive changes to our venues to keep our staff and customers safe as well as delivering essential social value to communities across the UK.”