Quarter of operators predict they will fail by end of 2020 without more help

24-Sep-2020 - Last updated on 24-Sep-2020 at 10:42 GMT

Teaming up: trade bodies have joined forces to call on the Government for further support

Some 23% of operators believe their businesses will fail by the end of the year without further Government support, new research has found.

The survey, which includes members from trade bodies UKHospitality (UKH), the British beer & Pub Association (BBPA) and the British Institute of Innkeeping (BII) conducted by data experts CGA, revealed the high level of concern about the sector without aid.

This was prior to the latest restrictions announced by the Prime Minister including a 10pm curfew and table service only.

The research also found one in eight hospitality staff have already been made redundant and on average, businesses believe their workforce will be reduced by a quarter (25%) by February next year, compared to February 2020. This is a drop of 675,000 jobs lost in 12 months.

Just 7% of those surveyed said they were optimistic about the prospects of hospitality over the next year – a decrease from just over a fifth (23%) in August and 19% in July.

Immediate stimulus package

BBPA chief executive Emma McClarkin 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.”

The future of the sector still hangs in the balance, with many venues remaining closed and others operating at reduced capacity and a fraction of normal revenue, according to UKH chief executive Kate Nicholls.

Razor-thin margins

“The additional restrictions announced this week place even further burdens on a sector operating with razor-thin margins and needs all the help it can get," Nicholls said.

“It is vital these restrictions are reviewed regularly. We need comprehensive financial support so 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 to 2021 as must the business rates holiday. We also need the Government to step in now and help deal with the rent debt that has built up over months of enforced lockdown.”

BII boss Steven Alton said the findings reinforced the urgent need for a specific Government support package for the sector, particularly in light of the new restrictions.

“Government support in our sector is an investment that will deliver strong returns economically, with skilled jobs and allowed our venues to continue to be at the centres of their communities across the UK," he added.

“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 in successfully delivering extensive changes to our venues to keep staff and customers safe as well as delivering essential social value to communities across the UK.”