Ted Schama: A war cry for reinforcements

Hooray, hospitality will be reopening in July. The nation can rejoice. 

The truth is, the hospitality industry is directly in the eye of the storm and, in many ways, in a more precarious position than other sectors.

Looking back, the public were told to avoid restaurants and hospitality even before the lockdown commenced. A hard hit to take, but one that was helped somewhat by our new hero, Rishi Sunak. The Chancellor came to the rescue with the furlough package that gave everyone much needed breathing space. This was coupled with other measures to see our way through this period.

Like any other war, however, it is not the first phase that is the hardest. The real challenge is winning it with minimal casualties, and this is where the hospitality sector is most at risk.

Many leading restauranteurs have commented on what the new normal may look like, but perhaps none more eloquently than Jeremy King of Corbin and King, owners of the Wolseley and other landmark restaurants. 

“Chris and I always had as our guiding light the premise that we opened restaurants we would like to go to,” King explained. “I am afraid I certainly have no interest in going to a place where I am sitting in isolation, surrounded by Perspex screens and served by someone in a mask and gloves. Where’s the fun in that?”

It is a stark reality we all face.

So, by indicating restaurants will be able to open from early July, the government has exposed the sector to the most dangerous phase of this war. Being legally allowed to open and open to make a profit are two very different things.

In the casual dining market, profit margins are tight. Consequently, even if you were happy with the new atmosphere spoilers, if capacities are halved or severely limited, operators will not be able to make a profit. For the majority, this is likely to mean they are better off not opening at all, undoing their hard work, innovation and commitment to customers during the lockdown.

When you consider the challenges, the hospitality sector needs a strong package of further support to help it through the re-opening phase. While other areas of the economy already have a much clearer and faster route to re-opening, it is much more complicated and protracted for the hospitality sector. In fact, the industry is likely to be feeling the effects for some time after the rest of the country has adjusted to the new normal.

And we are not just talking about operators here, but suppliers and landlords too are part of this. Whatever your stance on rent, an open for business sector is the one we all need for existence, and hopefully profitability once again.

The time is therefore now for the government to raise its game once again. For our hero, Rishi, to show his support for a sector that represents 10% of UK employment, 6% of businesses and 5% of GDP. While very welcome, furlough extensions will not be enough to see the industry through this complex re-opening phase. Further substantial financial support is required to both assist operators with their total outgoings and to avoid the significant crash that many landlords are facing over the next few months. We need sustained help on all sides until the situation normalises or is as close to that as possible.

It is inevitable there will be casualties, and it would be naive to think otherwise, but the challenge now is to support the hospitality industry to come through this as intact as possible. To minimise casualties as we win the war.

The sector stands ready to fight, but it needs reinforcements.