UKH Calls For Government Action On Rent To Protect Hospitality Jobs

UKHospitality has written to the Government urging it to intervene and broker a solution that solves the current stalemate on rent in the sector. Without this, the trade associations warns, there will be widescale job losses and business failures in the coming months.

In a letter to Business Secretary, Alok Sharma MP, UKHospitality has highlighted that, despite an announced moratorium on enforcement action, hospitality businesses are still being aggressively pursued by a minority of landlords. These businesses, the vast majority of which have virtually no income and are closed during lockdown, are still being threatened with winding-up petitions, having deposit funds taken and being served with County Court Judgements.

In circumstances where landlords have offered rent deferrals, this will just lead to an accrual of debt which will be incredibly hard to pay back as hospitality businesses will be trading below normal levels for the foreseeable future.

UKHospitality warns that although the Government has urged tenants and landlords to work together to find solutions, the commercial property market is effectively broken. In a recent survey of sector business leaders from CGA and Fourth, rent payments and securing landlord agreements were the top priority for 67% of respondents.

The letter calls on the Government to urgently step in to broker a solution at a high-level Ministerial summit, based on the following principles:

  • All relevant stakeholders must be involved
  • Government intervention – both financially and legislatively – is necessary
  • The assumption that the vast majority of hospitality and leisure businesses will not be able to pay rent for the remainder of 2020
  • There must be a ‘sharing of the pain’ between tenants, landlords, investors and Government
  • Action must be taken swiftly, with a resolution before the next quarterly rent date at the end of June.

UKHospitality Chief Executive Kate Nicholls said: “In June, sector businesses are due to pay nearly £800 million in rent, having been forcibly closed and generated no income for over three months. We appreciate that landlords have their own financial pressures and the majority of landlords have been happy to work with tenants to find solutions, but a damaging minority continue to put pressure on beleaguered hospitality businesses at the worst time.

“Having discussed this issue with a vast number of industry bodies, it’s clear we need a National Time Out on rent as the vast majority of hospitality and leisure businesses will simply not be able to pay for the rest of the year. The Government must step in quickly to help hospitality businesses, landlords and investors find a mutually beneficial solution. We are ready and eager to sit down with all stakeholders to thrash out an equitable solution, with the Government acting as honest broker.

“If the commercial rental market collapses, it will be to the long-term detriment of the whole economy and lead to millions of hospitality workers losing their jobs and swathes of businesses permanently closing their doors.”