UKHospitality has called for greater support for the hospitality sector following the second national lockdown, as well as “urgent clarity” on the tier system businesses will enter as the lockdown ends next month.
Giving evidence to the House of Commons BEIS Committee, UKHospitality CEO Kate Nicholls argued that restrictions have already had a “devastating” impact on the industry in what would have been its most profitable quarter.
She added that some operators were banking as much as 40% of their annual profits between Halloween and January. This comes at the end of a year which has seen the annual turnover of the sector drop by 40%, with over reported 600,000 job losses.
Nicholls told the committee that venues have had “precious little time in which to digest and implement the rules that the Government is introducing”.
She said: “It is imperative that businesses are given the maximum amount of time ahead of reopening, to prepare for the tier that they will be entering. This needs to be transparent and clear, with clear guidance available for moving between the tiers.
“We also require detailed guidance on the restrictions. Over recent measures, hospitality businesses have had 6 different changes on the conditions under which they can operate in the last 8 weeks. This puts pressure on all businesses, but particularly SMEs in the sector. We need to know for certain what we will be facing over Christmas and New Year.”
She added: “Businesses never really came out of lockdown one. Stringent restrictions were already putting the sector below breakeven point. Hospitality has gone from a precarious situation to being back into intensive care during this November.
“UK-wide, UKHospitality estimates that sector cash burn during lockdown will be close to £500m. Without more support, the impact of this lockdown will be even more severe than last time.’’
Nicholls also called for continued government support through 2021, highlighting key areas of support as rent moratorium extensions, a VAT reduction extension beyond March, emergency clarification of the CJRS Bonus “black hole”, and “realistic” grant support that reflects the cost of closure.