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Thu 16th Dec 2021 - UKHospitality highlights desperate need for financial support as sector suffers £4bn sales drop
UKHospitality highlights desperate need for financial support as sector suffers £4bn sales drop: UKHospitality has highlighted the desperate need for financial support for the industry as it revealed the sector has suffered a £4bn sales drop in the wake of new restrictions. The industry is suffering a drop in trade of a quarter with bosses expecting a further drop of the same amount – and the trade body said such 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, figures show 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. Pubs, bars, cafés and restaurants have already seen trade fall by a third and are expecting a further 22% drop in bookings for December. Nightclubs have fared even worse with revenue already down by a quarter. City centres have been particularly hard hit amidst major corporate booking cancellations. UKHospitality chief executive Kate Nicholls said: “Christmas trade is always crucial for the hospitality industry, making up as much as a quarter of the year’s profit for many businesses. 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.” Martin Williams, chief executive of M and Gaucho Restaurants, said: “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. 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, chief executive of Competitive Socialising, added: “It’s almost unbelievable that in the week before Christmas we are looking at trade levels and staff sickness and contemplating closing some of our venues until trade levels improve. Last night central London was like a ghost town. 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 16 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.” Greg Marchand, chef patron, Frenchie Covent Garden and Paris, said: “Once again our very fragile financial model is being put through yet another challenge. There is a climate of fear in the air, people cancel their reservations at last minute, business drops and we do not have any guidance or support from the government. For me I call it the ‘grey zone’, for example in France if business drops but still you can open, sometimes better if the government simply says ‘close your business and we give you support'. But three is no furlough scheme and still have to bear the cost of wages and we need to pay rent in Covent Garden. With a drop in reservations, we also become overstaffed, working at full capacity but with lower turnover. We would expect more this time round – are we going to be able to survive another crisis like this? We are just keeping our head above water. What steps are the government going to take this time to support our industry? This is our busiest period of the year and once again we are concerned about January and the whole of the first quarter – a quiet time at the best of times. The climate of ‘fear’ upon us, we are starting to really feel it and it shows on our reservations dropping by almost 40% since last week.”


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