Bars expect ‘significantly suppressed’ trading for months

22nd June, 2020 by Melita Kiely

The on-trade is pushing the UK government to confirm the hospitality sector can reopen on 4 July as new research shows businesses face a “lengthy and painful recovery” with “significantly suppressed” trading for several months.

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The hospitality sector is urging the UK government to confirm when it can reopen

The survey, conducted by trade body UK Hospitality (UKH), revealed low expectations from a range of different operators. Before the pandemic, hospitality was the UK’s third biggest employment sector and generated £39 billion (around US$48.5bn) worth of tax for the Exchequer.

UK prime minister Boris Johnson has previously said some parts of the hospitality industry could reopen from 4 July. However, no further update has yet been given. Some venues, such as the Oakman Inns pub group, have said they will reopen on 4 July regardless of the UK government’s advice in order to avoid any further job losses or venue closures.

Kate Nicholls, UK Hospitality CEO, said: “The 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.”

Two-metre rule ‘financially unviable’

The UKH survey asked participants, who are members of UKH, to give their expectations on the three months following reopening and in December, a “vital revenue-generating month” for the industry. Questions also covered the difference in trade between having a one-metre physical distancing rule, compared to two metres.

According to UKH, the results showed that overall, hospitality firms “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 physical distancing rule remains in place.

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The on-trade is expecting a “lengthy and painful recovery” when it reopens

At one metre, UKH said trade is expected to be at “just over half” of what it was in 2019.

The near-future outlook is anything but optimistic, with expectations for August sitting at declines of around 78% and 65% compared to the previous year, depending on the level of physical distancing required in venues.

“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,” Nicholls added. “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 bar 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.”

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