‘Bleak outlook’ for operators facing recovery

Hospitality businesses are preparing for a lengthy and painful recovery, with levels of trade expected to be significantly supressed for many months to come, a survey of UK Hospitality reveals.

The findings paint a gloomy picture of low expectations in a sector that is usually the UK’s third largest employer and generates £39bn of tax revenues for the Exchequer.

UKH is calling on the national government to urgently confirm 4 July as the date the hospitality sector reopens and for it to make renewed commitments on extended support for the sector, in order to prevent widespread business failure and further job losses.

Respondents were asked to give their expectations on trade in the three months following reopening and in December, a vital revenue-generating month for the sector.

They were also asked about the difference in trade between having a one-metre social distancing rule versus a two-metre rule.

Overall, hospitality businesses overwhelmingly expect a very slow recovery in the second half of 2020, with a ‘worst-case scenario’ in December of trade at around a third of the previous year’s level if the two-metre rule remained in place.

Even at one metre, trade is only expected to be at just over half the level compared to the year before.

The shorter-term outlook is yet more downbeat, with expectations for August 2020, a key month for hospitality and tourism, at between 78% and 65% down depending on the level of social distancing required in venues.

Commenting on the survey results, UKHospitality CEO Kate Nicholls, said: “This bleak outlook from operators should sound the alarm with governments across the UK. First things first, we urgently need confirmation of the reopening date for hospitality without further delay. Businesses need time to prepare and the first step on the road to recovery is confirmation of when they can open their doors again. Those who rely on advance bookings, such as hotels, leisure parks and attractions need answers now.

“For most venues, operating with the two-metre social distancing rule is financially unviable, so if the current review on social distancing recommends it is safe to do so, we would urge the Government to adopt the internationally-recognised standard of one metre. Such a reduction would be a huge boost for the sector and prove critical to the survival of the vast majority of businesses.

“With trade forecast to be materially down for many months to come, the Government must consider targeted support to help assist the sector’s recovery, such as a cut in tourism VAT and Air Passenger Duty, support for missed rent payments during closure and the creation of an autumn Bank Holiday.”