Hospitality sector calls for business investment package

Industry leaders in hospitality have urged the government to commit to an “ambitious” programme of business support and investment to stimulate the revival of the sector as restrictions begin to ease. 

In a letter signed by 120 hospitality leaders, the government has been called on to “act decisively” for a sector that was “one of the first to be hit by the crisis, was hit harder than other sectors and is likely to be hit longer than other sectors”. 

It comes as UKHospitality has warned that the sector is expected to see sales drop by 56% against the year prior, reducing revenues by £73.4bn.

In addition, half of hospitality businesses do not expect to reach breakeven until the end of next year, highlighting the “urgent need for decisive support” to prevent further business failures and job losses. 

The letter in question has outlined three recommended areas in which the government can support hospitality businesses.

The first area is ‘Restart’, which calls for an extension on the deferral of all tax liabilities currently due in July, as well as removing the obligation to pay interest on late payments.

The plan also asks the government to establish a targeted Hospitality, Leisure and Retail Property Bounceback Grant to cover a proportion of rent debt during closure, reopening and recovery, in order to “break the impasse” on rents. 

The second area is ‘Recover’, which looks to “boost confidence, demand and incentivise spend” in the sector by temporarily reducing VAT to 5% for hospitality services. 

The group has also called for hospitality employers to be allowed access to full furlough until the end of October, and to double the employer NIC threshold.

Finally, the letter outlines plans to ‘Revive’ the sector by extending the hospitality business rates holiday to March 2022 ahead of fundamental reform of the business tax system.

UKHospitality CEO, Kate Nicholls, is now urging the government to “act decisively and positively” to give hospitality the best possible chance of not only surviving the crisis but thriving in the aftermath.

Nicholls said: “Our sector has been a high-profile casualty of this crisis and businesses are only now just beginning to reopen.

“For those businesses that have survived, the hard work begins now. We cannot assume that we are now in the clear just because our doors are open again. Many businesses have taken huge hits and hundreds of thousands of jobs are still in the balance.”

She added: “If we want to make a real success of this reopening, keep businesses alive and jobs secure, then the Government needs to provide support. Support from the Government has been extremely helpful in keeping venues afloat and it has saved jobs. 

“There is no possibility of stopping now, though. Anything less than a full show of support from the Government risks undoing much of the good work that has already been done and will cause lasting damage to employment and the UK economy.”