Following Boris Johnson’s announcement yesterday advising the UK to “avoid pubs, clubs, theatres and other such social venues,” leaders across the hospitality industry have warned of the devastating effect these measures will have if the sector is not supported accordingly.
Kate Nicholls, CEO, UK Hospitality told the Victoria Derbyshire this morning that the body anticipates revenue and footfall in the hospitality industry will drop by 100% by the end of the week.
On top of business rates relief and an NIC holiday, Nicholls called for a government approach similar to that seen in France Germany, Denmark, Belgium and America, “where they’ve said no jobs should be lost as a result of this and have agreed to underwrite 70%-90% of the hourly waged staff’s costs who are likely to face job losses should the businesses be closed.”
Estimating it would cost the government about £5bn to fund this proposal, she said it was “the big, bold immediate measure we need.”
Also speaking on the program, Emma McClarkin, CEO, BBPA said the government measures were “devastating news for the pub sector.”
“We are about two weeks away from some of these pubs having to close, and some will close for good. That’s a community asset that will be lost forever,” she said.
Even if formal closures are made, McClarkin warned that many pubs will still be unable to claim on their insurance.
“They will need desperate help from the government,” she said. “We need to get cashflow going into the industry and we need liquidity to be addressed immediately. There will be mass job losses by the end of this week if we don’t see urgent action now.”
In a statement released yesterday, Sacha Lord, night time economy adviser for Greater Manchester said: “I am overwhelmingly disappointed with the measures. The uncertainty this measure has placed on the hospitality industry is likely to be crippling.”
Lord said that the government’s decision not to implement an outright closure, combined with the lack of an end date – “one of the only countries not to provide a specific timeframe” - will affect the rights that venue owners have with regards to insurance claims.
Reassuring operators that he was in active discussions with government, Lord recommended three adaptive measures for hospitality businesses.
These included urging restaurants, bars and cafes to prepare takeaway and delivery facilities where possible, to offer postponed bookings or gift cards for cancellations and to ask customers if they would be willing to pay upfront for future visits in return for discounts.
“We must be brave enough to take these hits to help combat the spread of Coronavirus and protect our staff and customers,” he said. “Together we can help our sector stay safe, stay well and move through this unprecedented time.”
Simon Mitchell CEO of Kerb said: “Hospitality businesses, please stop calling for an official shut down as your insurance will not cover you. We need to shift the agenda to calling with one voice for the government to support restaurants and bars by offering us rent relief, a 3 month (minimum) business rates holiday and protection for our staff during the close down.”
On the issue of insurance claims, Peter Hemington, corporate finance partner at BDO said that “while the measures announced in the budget to help businesses through the Covid19 emergency were welcome, they did not go nearly far enough.”
“Very few businesses have cash reserves available to get through a likely two to three month shutdown, so the majority will struggle severely unless drastic action is taken.”
“The government has a tried and tested role as an insurer of last resort,” he added. “It must adopt that role now by offering businesses impacted by the coming Coronavirus shutdown insurance against their reasonable losses incurred in the coming months.”
Meanwhile Sky announced it would stop charging venues for its Sky Sports service. It said “supporting businesses and doing what we can to help them in uncertain times is very important to us. We would like to reassure our Sky Business venues that from 14 March we will not be charging them for their Sky Sports service until a live sport schedule returns.”
Chancellor Rishi Sunak will be chairing a new ‘business economic response committee,’ and some new measures are expected to be announced later on today.
Industry leaders call for ‘drastic’ Government action
Leaders across the hospitality industry have warned of the devastating impact the government’s advice to avoid pubs, clubs, theatres and other social venues could have if the sector is not supported accordingly. UK Hospitality anticipates revenue and footfall will drop by 100% by the end of the week, and alled for a £5bn funding package to protect jobs and the future of the sector. BBPA CEO Emma McClarkin warned community assets would be “lost forever” if pubs are not supported. Sacha Lord, night-time economy adviser for Greater Manchester said the measures were “likely to be crippling”.