Trade body UKHospitality has said “extra work” is needed to help support hospitality businesses after a survey has identified gaps in current government support.
UKHospitality revealed the results of the first “comprehensive” survey of the hospitality sector during the COVID-19 pandemic, in which businesses were asked about their experiences of accessing loans, insurance claims, the speed of grant payments and workforce issues.
It said the results have highlighted “flaws” in the level of support provided to businesses during the crisis. With around half (48%) of businesses have applied for loans, but the majority of those receiving a response (57%) have had their bids turned down.
Government-imposed State Aid rules account for over a quarter (26%) of rejections, alongside banks telling business to exhaust their own capital first (28%).
In addition, nearly three-quarters (74%) of businesses have claimed, or intend to claim, for business interruption insurance. However,the study found fewer than 1% of businesses that have claimed have received pay-outs.
It also said only around a quarter of eligible businesses had received hospitality grants, which falls significantly short of Government estimates.
In terms of workforce, redundancies have been kept to a minimum (2%), with the majority of businesses furloughing staff, accounting for 84% of sector employees.
UKH said this demonstrates the “huge success” of the Government’s job retention scheme, and the need for it to be extended as the recovery begins.
Kate Nicholls, UKHospitality CEO, said: “These findings lay bare the extra work that needs to be done by governments, banks and landlords to make sure as many businesses as possible can survive this crisis.
“Hospitality was the first hit, the hardest hit and will suffer for the longest, and Government support needs to reflect these facts. Hospitality businesses will be key to recovery as prolific employers, major tax contributors, and hubs for social interaction.”
She added: “Governments across the UK have provided unprecedented support to assist hospitality through this crisis, and that is extremely welcome. Yet, we are in this for the long haul. Everyone is rightly looking to how the economy and the industry restarts in a way that avoids a return of this horrific pandemic. Before we get to recovery, we need to make sure that the support measures already announced are getting through to business.
“Loans must be fast-tracked with minimal restrictions, grants must flow to all businesses that need them regardless of size, and the job retention scheme must be amended to reflect actual earnings.”