More calls for support as hospitality ‘suffers £4bn sales drop’

By Joe Lutrario

- Last updated on GMT

More calls for support as hospitality ‘suffers £4bn sales drop’

Related tags Coronavirus ukhospitality Kate nicholls

UKHospitality says it is currently seeing a 25% reduction on expected trade, with industry bosses expecting a further drop of around the same as Christmas draws closer.

The trade body adds that the figures do not take into account the financial losses incurred by wasted stock, unnecessary labour and other commodities arising from cancelled events and bookings, which may not be covered by insurance.

Prior to the emergence of Omicron and Plan B restrictions, UKHospitality says figures showed the industry was on track to reach 95% of pre-pandemic trade levels but consumer confidence has plummeted and businesses are facing unprecedented and catastrophic levels of cancellations​, with some operators forced to close early for Christmas​.

Pubs, bars, cafés and restaurants have already seen trade fall by a third and are expecting a further 22% drop in bookings for December, according to the group.

Nightclubs have fared even worse with revenue already down by a quarter. City centres have been particularly hard hit amidst major corporate booking cancellations.

“Christmas trade is always crucial for the hospitality industry, making up as much as a quarter of the year’s profit for many businesses,” says UKHospitality chief executive Kate Nicholls. 

“Last year Christmas was cancelled and so much rested on this December period for businesses already staggering under a burden of debt incurred from the pandemic and facing rising costs across the board.”

“If operators are unable to trade profitably over the next month, many will simply not survive - and those that do make it through face a return to 20% VAT in April.”

“The Government must step in now and provide measures that support the businesses and jobs in the sector – by committing to keeping VAT at 12.5%, suspending business rates payments for the first quarter of 2022 and reinstating recovery grants.”

M and Gaucho CEO Martin Williams has also called for more support, stating that restaurants have once again been let down by the Government.

"With one hand they have instructed the public to ‘stay at and work from home’, whilst the other hand offers no support to our sector," he says.

"Unless the Chancellor comes out of hiding and re-introduces the furlough scheme, extends existing business rates and VAT support, both businesses and hospitality workers are being left in extreme risk.”

Matt Grech Smith, CEO of Competitive Socialising, says that it was 'almost unbelievable' ​that in the week before Christmas his business was contemplating closing some of its venues until trade levels improve.

"Last night central London was like a ghost town," he says.

"It seems that with rising infection levels, many people are voluntarily locking down as they don’t want to risk getting ill before Christmas. It’s the 16th​ of December and Christmas trading is effectively over.

"A massively curtailed Christmas on the back of already having been closed for the first half of the year is a further disaster for the hospitality industry.”

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