The sector has welcomed this afternoon’s announcement from the Chancellor as well as his commitment to a top-up of discretionary grant funding and the release of a £1.5bn package to support the supply chain.
The rent moratorium has also remained in place and commercial landlords have been asked to show patience with struggling hospitality tenants.
Generous package
UKHospitality chief executive Kate Nicholls said: “This is a generous package building on existing hospitality support measures to provide an immediate emergency cash injection for those businesses who, through no fault of their own, have seen their most valuable trading period annihilated.
“It will help to secure jobs and business viability in the short term, particularly among small businesses in the sector, and we particularly welcome the boost to funds for the supply chain and event and business catering companies so badly affected by the reintroduction of work from home guidelines.”
Figures published today (21 December) by UKHospitality showed pub revenue was down more than 40% over the past weekend, with one in five businesses having reported a sales drop of more than 60% and December expected to be a disaster for the hospitality sector.
Urgency to get funds out
The Chancellor’s announcement comes after he stated just last week there were existing adequate measures in place for the hospitality sector.
Nicholls added: “It is a generous top-up emergency fund in addition to previous support and with a commitment from ministers to prioritise hospitality and its supply chain in allocation of funds.
“There is now a real urgency in getting this funding to businesses so we urge local authorities to prioritise distribution of funds to make sure jobs and businesses are preserved through this difficult period.”
However, the Night Time Industries Association (NTIA) said the package of support was “far too little”.
NTIA chief executive Michael Kill said: “Businesses are failing, people are losing their livelihoods and the industry is crippled. Mixed messaging, coupled with additional restrictions, have had a catastrophic impact on our sector over the past two weeks.
“At this critical point, we need strong leadership and a clear pathway from Government with a long-term strategy for new Covid variants. The open/close strategy is crucifying businesses. Every pound of help is much needed. But this package is far too little and borders on the insulting.”
Robert Hayton, president at real estate adviser Altus Group, was surprised there was no change to business rates relief. He said: “Trade has nosedived with Omicron yet the cap on support for the very largest operators essentially means that they will continue to pay full rates bills on a large number of their properties.
“The Government retrospectively removing their appeal right on pandemic grounds adds insult to injury.”
Critical time
The funding will barely scratch the surface of what's needed by hospitality businesses, according to Chris Maloney, partner and hospitality and leisure sector expert at accountancy firm Menzies LLP.
He said: “The fund made available by the Government to struggling hospitality and leisure businesses is unlikely to be particularly welcomed, as it barely scratching the surface of what’s needed to support the sector at a critical time.
“At what should be one of the most profitable periods of the year, business owners are facing cancellations, empty venues and ongoing uncertainty about future restrictions. As such, the Government must go further to support hospitality businesses that are likely to be teetering on the brink of insolvency. For example, they could have opted to freeze business rates until the end of March, as well as further reducing VAT.
“To help survival during the winter months, it’s more important than ever for struggling business owners to focus in on cash flow. However, they also need to be able to look at their business in an unemotional way and know when the time’s come to seek expert support.”