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Bar and Clubs Hit Hardest By Pandemic

While hospitality has been “hit hard” by coronavirus, bars and clubs have fared the worst and consumer spending is below 70% of pre-pandemic levels, according to a report by The Office For National Statistics.

The report titled “Coronavirus and its impact on UK hospitality: January 2020 to June 2021” said the impact on hospitality had been “uneven” with bars and clubs being the biggest victims. It added consumer spending in hospitality started to increase in May 2021 but remains at less than 70% of pre-pandemic levels with a similar picture being seen in turnover – in May 2021, this remained one quarter lower than 2019 levels. It also found spending by businesses in the hospitality sector has seen smaller increases compared with consumer spending in May 2021, with payments to suppliers from food and drink businesses remaining about half of pre-pandemic levels. Confidence of business survival in the hospitality sector started to increase in May 2021 but remains below the all-sector level.

Meanwhile, job vacancies in the hospitality sector have seen large increases and are higher than pre-pandemic levels, however, in June 2021, the number of employees within the sector remained 11% below February 2020 levels. The report stated: “Hospitality (accommodation and food activities) has been one of the sectors most affected by lockdowns and government restrictions throughout the coronavirus pandemic. The sector may have also been affected by Brexit, but as the end of the transition period coincided with the start of the latest lockdown, it is hard to separate the effects of the two.” Data from HM Revenue and Customs showed that, in April 2020, just under 1,650,000 employees in the sector were on furlough as businesses paused trading, falling to just under 590,000 employees furloughed at the end of May 2021, which represented 25% of all furloughed employees.

As the hospitality sector adapted to the changing restrictions, the proportion of businesses temporarily closed fell from 81% in the spring 2020 lockdown to 54% in the early 2021 lockdown. Business turnover also reflected this change, showing higher revenue in early 2021 than in spring 2020. In May 2020, turnover was just over £1.2bn compared with £3.4bn in March 2021. This rose further to £6.9bn by May 2021 after restrictions were partially eased, the highest figure since August 2020. Although that was still about 25% lower than its 2019 level. This revival was particularly strong for the restaurant and mobile food service activities sub-sector where turnover in May 2021 was £3.3bn, five and a half times what it was in May 2020 – this was likely to be because more restaurants were able to provide takeaway services and outdoor dining was permitted.

Looking at the performance within hospitality, the report found pubs and nightclubs have been one of the worst affected sub-sectors; turnover in May 2021 was 39% lower than May 2019 and has consistently remained below 2019 levels since the pandemic began. In the case of pubs, this is likely a consequence of businesses being closed or disrupted for long stretches at a time. Pubs have been less able to offer a takeaway service when closed and have had partial restrictions, such as earlier closing times and substantial requirements around eating even when open. Nightclubs have remained closed by law since March 2020.

On the future of jobs in the sector, the report said: “Most economic indicators point to the start of a recovery for businesses in the hospitality sector, with the labour market showing similar trends. Since early April 2021, furlough rates in the hospitality sector have been declining. The furlough scheme has now started winding down, with the payment provided to employers reducing from 80% of employees’ wages, to 70% in July 2021, falling further to 60% in August. This may lead to further reductions in furloughed employees in the sector.” Data showed the total number of payrolled employees in the hospitality sector increased to over 1.8 million in June 2021, from a low of 1.7 million in March 2021. However, payrolled employees remain below a pre-coronavirus pandemic figure of more than two million in February 2020.

The report also stated: “Job vacancies in hospitality have rapidly increased throughout 2021 as businesses look to employ more staff to meet demand, with reports of businesses struggling to employ the staff needed in hospitality.” In the period April to June 2021 there were an estimated 102,000 job vacancies in hospitality, nearly five and a half times higher than the 19,000 recorded in December to February 2021, and higher than pre-pandemic levels. This increase may indicate the beginning of a temporarily tight labour market or bottleneck, where hospitality businesses are looking to increase employment but currently cannot recruit the numbers necessary.

Restrictions set to end on the 19th July

All restrictions in England are set to be dropped on 19 July, health secretary Sajid Javid confirmed yesterday, however, events and nightclubs are being urged to make use of Covid certification.

A plan is due to be published “encouraging businesses and events to use certification in high-risk settings”, even though both Javid and Boris Johnson said last week that ‘vaccine passports’ would not be required to enter hospitality venues.

During a press conference, the prime minister said that he “didn’t expect that the whole country will return to their desk as one from Monday” and that the government was “urging nightclubs and other venues with large crowds to make use of the NHS Covid pass”.

As of Monday, nightclubs will be permitted to reopen, all legal limits on the numbers of people meeting indoors and outdoors will be removed, the requirement for table service in venues will also end and the government will no longer instruct people to work from home.

Michael Kill, chief executive of the Night-Time Industries Association said it marked “the beginning of nightlife’s long journey to rebuild itself”.

He said: “There are some important hurdles ahead for our sector, including changes to the isolation rules which have the potential to throw the recovery off course, but for those businesses that have made it this far in the pandemic, I feel confident that the sense of community and togetherness the sector has shown to this point will help us overcome these challenges.

“We look forward to the government providing more guidance for businesses owners – this should be practical and easy to navigate. But from today’s statement, we can say that the government are right not to mandate the use of Covid status certification systems. Much of the night-time economy relies on spontaneous consumers, and by permitting businesses to opt-out, the government have allowed for this trade to continue.”

Joel Williams, director and operations manager at Jamaican street food event catering company Artel’s, said enquiries were already increasing daily: “There seems to be a change in public opinion and mood, so it’s been positive.

“A lot of corporate clients are starting to enquire more. Before it was just completely private weddings, that was it really. Whereas now there have been a few more public-facing events, which is good because they have bigger budgets.”

However, he was against the idea of Covid certification being used at events: “I just think it’s a slippery slope… we just have to put all the appropriate measures in place to make sure that people can use their common sense and protect one another.”

Offices reopening could be particularly positive for business and industry caterers after more than a year of people being advised to work from home, with members of the Food Service Circle welcoming the news.

Catherine Roe, chief executive of contract caterer Elior UK, said she was “delighted” with the lifting of restrictions but added: “Without an express working from home message from the government, we remain cautiously optimistic about the impact this will have on the timing of workers returning to offices.”

Wendy Bartlett, founder of caterer Bartlett Mitchell, said that even before the announcement there were “clear signs” businesses were “accelerating their reopening plans”.

She said: “It will be a challenge to understand what numbers will look like in workplaces. As a caterer we are agile and adaptable to all sorts of changes in demands, so we’re quite used to not knowing what our numbers, and we always expect the unexpected so we will manage, come what may.”

Some businesses have already said they will continue to ask guests and staff to wear masks and several operators remained cautious.

Trevor Gulliver, co-founder of London restaurant group St John, told The Caterer the team would be taking a gradual approach to lifting restrictions.

He said: “We will be patient and watch how things evolve. We will not be rushing to drop masks or any protocols within any of the restaurants because [the pandemic] changes sometimes in the space of two or three days.

“We’re in central London and we need to respect the confidence of our customers and our staff, we won’t be rushing to put out the bunting.”

The same cautious approach will also be adopted in the reopening of its restaurant at London’s Bridge Theatre, which currently only offers drinks service.

“[The restaurant] is an important source of revenue and it supports the theatre, but we must have patience. The most important thing is that people have confidence to come back to the theatre first,” said Gulliver.

Rent Moratorium extended until March 2022

The government has confirmed that the rent moratorium protecting commercial tenants from eviction for not paying rent, introduced last year in response to the pandemic, will continue until 25 March 2022.

MP Steve Barclay, chief secretary to the Treasury, delivered an economy update in the House of Commons this afternoon, confirming the moratorium extension. In the event of commercial negotiations between tenants being unsuccessful, tenants and landlords will enter binding arbitration.

He said: “All tenants should start to pay rent again in accordance with the terms of their lease or as otherwise agreed with their landlord as soon as restrictions are removed on their sector if they are not already doing so. We believe this strikes the right balance between protecting landlords and supporting those businesses that are most in need.”

Kate Nicholls, UKHospitality chief executive, welcomed the measures and said the legislation will “form a strong bedrock for negotiated and fair settlements that can help heal the damage that the pandemic has wrought”.

Staff Shortage Hits Hospitality Sector

The shortage seems to be most acute in London and the South-East.

Lorenzo Manconi, chief executive of Romet Group, a chain of nine restaurants and pubs in London and Essex, told The Economist that Brexit is part of the problem. Many of the European workers whom he put on furlough during the pandemic are now heading home. He has replaced them with Britons, and 70% of his staff have no experience. “They will need training and it will cost us extra and we aren’t sure if they are going to stay with us long term,” he says. Job postings for pub and restaurant positions on Indeed, a recruitment website, were up by 82% in the four weeks to May 7th, and are now 4% above their pre-pandemic level.

Another problem for recruitment has been that the sector has been closed for so long that a number of the employees have moved on to other jobs in sectors such as retail or logistics. In addition, some staff who might have moved into hospitality from other badly hit industries or firms are being left on furlough so there is no need to move jobs. Some firms are also quite likely to be keeping people on furlough until they can be brought back and why would you move from being paid to watch daytime TV to work in a hot kitchen! Those trained staff that are coming back are being given pay rises to retain them and demand for staff has been boosted by the social-distancing rule that pubs must serve customers at tables.

Some larger firms are considering raising pay but enforced closures have drained the reserves of many of their smaller peers.

In the London area, many pubs have put up their prices whether this is to try and recoup lost trade or a way to ensure that they can pay their staff better to retain them remains to be seen.

Why are there so many shut pubs and restaurants?

The simple answer is really 2-fold; Staff shortages and people not going back to the office. Many pubs and restaurants in London are just not seeing enough footfall and after-work get togethers to be sustainable. If there is any chance a business doesn’t have enough staff and so service is poor why take the risk on your brand? Some people have actually said after grants etc. they are better off closed!

 

Moves to stop rent arrears crippling hospitality firms

Business minister Kwasi Kwarteng has said he did not want rent arrears to “cripple” hospitality firms and that the government was looking at ways to help firms manage their debts. He told the BBC that the government was aware that hospitality businesses were facing a build-up in rent arrears after many months of not being able to trade normally. He said: “The government is working very closely together – the Treasury and [the Department for Business, Energy and Industrial Strategy] – to see if we can come up with an arrangement whereby tenants and landlords can work together to make sure this rent issue doesn’t cripple business.”

At the same time, Nisha Katona, founder of Mowgli, told the BBC that the UK’s high streets are already “littered with the gravestones” of independent bars and restaurants that didn’t have backers with deep pockets or hadn’t been able to negotiate concessions from their landlords. Katona said many businesses would make little or no profit while capacity was still restricted. She said: “In order to survive, what needs to happen is that we need to trade at the levels that we were trading prior to covid. While social distancing is in place, we cannot do that. Many places will not be able to make any kind of profit while restrictions are in place.” She fears many businesses will go bankrupt in the autumn as landlords demand rent arrears and says the government should look at things like business rates and VAT rates as well as support with debts due to landlords. Kwarteng said he hoped the final lifting of restrictions, including ending the need to distance indoors, would go ahead in June, but that he couldn’t offer any “cast iron guarantees”.

Hospitality Industry Loses Case To Reopen Earlier

The High Court has ruled in favour of the Government regarding allowing restaurants and bars being allowed to open ahead of the planned easing of lockdown measures.

The case was brought by Greater Manchester night time economy tsar and founder of Parklife and The Warehouse Project, Sacha Lord, and Hugh Osmond, founder of Punch Taverns.


They sought to challenge the decision to delay the reopening of indoor hospitality until May 17, arguing there is no justification or scientific basis for indoor hospitality to remain closed while other businesses such as non-essential retail have been permitted to resume trading.

The judgment came just hours before a SAGE report emerged, indicating that ministers had been advised that “eating out in any food outlet or restaurant was not associated with increased odds” of catching COVID.
In the report, SAGE scientists admitted that the risk of “transmission in hospitality, retail and leisure are relatively low” with just 226 outbreaks in hospitality venues since the pandemic began.
It is unclear when the SAGE report was written or submitted to ministers, but the report was not disclosed by the defence during the legal proceedings.

In the overview, the Honourable Mr Justice Julian Knowles dismissed the call for Judicial Review to bring forward indoor reopenings as ‘academic’, noting the necessary hearing would now be unlikely to take place before May 17, the date by which indoor hospitality is already scheduled to reopen.

Despite orders to expedite the case, the final judgement was delayed due to a backlog in the court system.
Hugh Osmond said: “This case is not ‘academic’ for an industry that is losing £200m every day it remains closed, for the over three million people who work in our industry, or for the tens of thousands of businesses, suppliers, landlords and contractors forced into bankruptcy by government measures.

“Our legal action gave them a fighting chance, yet once again in 2021, the strong arm of the state has come crushing down on hope and aspiration.

“The judge said that COVID ‘justifies a precautionary or cautious approach on the part of the Government’. But when a crucial SAGE report is ignored, this goes far beyond caution, and questions need to be asked about when this advice was sought and why this important evidence was not disclosed.

“I am deeply concerned that the judge’s main reason for refusing judicial review was because our claim ‘was not brought promptly’, even though we issued our claim days after the roadmap became law on 25 March, with the court taking a month to provide its ruling.”

He added: “This judgment drives a coach and horses through our normal constitutional processes. Are we really being told that we should have issued legal proceedings on the basis of a Prime Minister’s press conference and a yet to be published set of laws?
“Our democracy should be better than this. The roadmap was based on models, not data, and today we have the data.

“Vaccination, infection and hospitalisation rates are all far much better than was forecasted and the Government now has a chance to turn this around, to capitalise on the NHS’s brilliant vaccination roll-out, to follow the data rather than arbitary dates based on outdated models, to believe in vaccines and to get rid of these appalling and severe restrictions once and for all.”
Sacha Lord said: “We are disappointed with the outcome. While this fight has always been an uphill battle, made harder by the Government’s delaying tactics and refusal to mediate, we are pleased that the case has shone a light on the hospitality sector and the unfair and unequal guidance within the recovery roadmap.

“Through our legal challenges, we have achieved significant outcomes for the sector, abolishing the substantial meal requirement with our previous court action and lobbying hard to remove the 10pm curfew. Both of these results have had a hugely positive impact on operators nationwide who have been unfairly treated throughout this crisis and undoubtedly saved many jobs throughout the industry.

“Through our legal action, we have sent a clear, strong message direct to the heart of government. We will continue to advocate for those who have been unfairly impacted throughout this crisis, and despite the outcome, we will continue to hold the Government to account and demand evidence-based decisions, rather than those drafted without detailed analysis or based on bias or whim.”


On the ongoing impact on the hospitality industry, he added: “The hospitality sector has gone above and beyond to implement measures which provide safe, secure environments – measures which were, let’s not forget, advised as safe by the Government themselves and which the court already deemed to be effective based on the evidence we provided in support of our previous judicial review.

“There are thousands of bars, pubs and restaurants across the country which are still closed and whose owners and employees are struggling financially due to these unfair restrictions.
“For the 40% minority who do have outdoor space, this weekend’s weather has only exacerbated the ongoing struggles the industry has continually faced, and I’ve heard of countless pubs that have been forced to close early or who have had zero customers due to the bad weather.

“Not only does this severely impact on business and sector recovery, but on the staff whose wages, and ability to pay rent, food and bills, are at the mercy of something as unpredictable as the weather.”
Having considered the ruling with their legal team, Osmond and Lord have decided that there is insufficient time to challenge it before May 17. Osmond is reviewing other legal options in relation to the matter.

PM approves stage 2 of UK Roadmap with no sign of COVID passport.

Boris Johnson has confirmed the next stage of England’s roadmap for easing coronavirus restrictions will take place next Monday as planned.

Non-essential retail and outdoor hospitality will reopen for the first time in months – and the ‘stay local’ message will end, meaning some domestic holidays will be possible.

Roadmap Stage 2 – April 12th

Pubs and restaurants will be allowed to serve food and alcohol outdoors. Unlike restrictions in December last year, there will be no requirement for customers to order a substantial meal with alcoholic drinks and there will be no 10pm closure.

But customers still cannot stand at the bar, and must order, eat and drink while seated outside.

The rule of six will apply (up to six people, or two separate households) as will social distancing rules. You will be required to wear a face covering when not seated.

In Mondays Downing Street press conference, the PM positively announced that the four tests for easing lockdown in England had been met. Boris then confirmed that the relaxing of restrictions, including outdoor hospitality had also been approved to go ahead.

In this press conference there was no announcement regarding the ‘Covid Passport’ in the PM’s opening statement, however, Iain Watson from the BBC brought them straight to the table when the journalist’s questions began. Mr Watson stated that proposals around vaccine passports had managed to “achieve the remarkable political feat of uniting a former Labour leader and a former Conservative leader against them”.

Boris Johnson was adamant stating that “There is absolutely no question of people being asked to produce certification when they go to the shops or to the pub garden.” He then added that they are not planned for Roadmap stage 3 either.

However, the PM did confirm that the passport method will be tested for major events in the months ahead and for international travel. Expanding on the travel element he also stated that “The idea of ones’ vaccination status being useful for international travel is something that all countries are looking at. I do think that’s going to be part of the way people deal with it and we need to think about that.”

The fact that ‘Covid Passports’ are not currently planned for entry to pubs and restaurants is a big boost to the hospitality sector. There were concerns in the industry about legal implications and enforcement issues. Additionally, there will be concerns amongst customers about privacy issues.

Hospitality Rescue has been helping struggling business owners for over 20 years with sensible FREE advice. If your hospitality business is experiencing problems, contact us FREE on 0800 9700539. Chat to one of our experienced advisers and we will see how we can help you!

Written by Luke Harris

Less than half of England’s pubs to re-open on 12th April

New figures suggest that just 40% of pubs will have the outdoor space available to reopen as some restrictions in England ease on 12th April, while hospitality industry chief says that are open will be “making a loss”.

There are about 37,500 pubs in England that could potentially open outdoors from April 12th, but just 40% of those roughly at 15,000, have a big enough outdoor space or beer garden to welcome back punters for a drink or will be financially viable, according to the British Beer & Pub Association (BBPA).

Emma McClarkin, BBPA chief executive, told BBC Breakfast that being outdoors will be “a huge restriction on capacity” and that guidance which does not even allow payments to be made indoors is a factor which will “complicate how we will serve people in venues”. Businesses have described these obligations as obstacles as they try to reopen and get back to trading as normal.

She said, “We know that pubs will be loss-making until all restrictions are removed. There will still be detrimental economic impacts from the introductions of these new processes and yet we haven’t been consulted fully on them.”

Under the new guidance all customers will need to sign into the pub on entry, rather than just one member of the group as was previously the case. This will add more confusion and inconvenience for customers and staff, according to the BBPA.

Office for National Statistics figures showed that payroll worker numbers had fallen by 693,000 since February 2020. More than half of this fall – 368,000 jobs – were lost in the hospitality sector as lockdowns and restrictions hammered the industry, according to the figures.

In a joint statement, the BBPA, UK Hospitality and the British Institute of Innkeepers trade bodies have written to the Government, stating: “Pubs will already be trading at a loss when they reopen with all the existing restrictions and Covid-secure measures in place.

If you can’t reopen your pub, we may be able to help. Hospitality Rescue has been helping struggling business owners for over 20 years with sensible FREE advice. If your hospitality business is experiencing problems, contact us FREE on 0800 9700539. Chat to one of our experienced advisers and we will see how we can help you!

Written by Luke Harris

Reservations in Manchester all but vanish as businesses are flooded with April bookings

A recent report in the Manchester Evening News stated the people are ‘biting our arm off’ for a table as demand has outstripped that during the governments ‘Eat Out To Help Out’ scheme last year. In less than two weeks’ time, if the road map goes according to plan, pubs and restaurants will be allowed to reopen their outside spaces.

For hospitality businesses in Grater Manchester, it will be the first time they’ve been able to have customers back since November. It’s the longest period of time that most have been closed since the pandemic started, due to last year’s ‘tier system’ forcing closure even before the current national lockdown started. With many places already booked throughout April and well into May, local operators say they have been ‘blown away’ by the number of bookings. The demand is so great that anyone wanting to visit 20 Stories restaurant/cocktail bar in Spinningfields, for example, on a Saturday night will have to wait till mid-June.

Despite the restrictions in place – and the unpredictable Mancunian weather, table reservations at most city centre venues have disappeared throughout April.

Tim Reynolds is director of operations at Kimpton Clocktower Hotel, which is home to The Refuge restaurant. He said: “We opened bookings Monday 15th March at 7pm and I would say it was chaos. It’s a lot busier than we expected and there’s a lot more enthusiasm than we expected”.

He continued, “I think if you want to come on a Tuesday in the first week of May, you might have a chance. It’s absolutely chocka for the first few weeks. It shows a huge amount of confidence in what we do and a huge amount of people wanting to get back to normal and wanting to support restaurants and bars. It’s really encouraging.”

Hospitality operators also say that people “are biting our arms off” to get even mid-week, mid-afternoon slots, with people even taking time off work to return to the pub for a pint.

Sadly, not all businesses in Manchester will reopen on 12th April as many have decided to close for good. Burdened with debt, rent arrears, tax liabilities and no income for over 4 months many have decided to throw in the towel.

Hospitality Rescue has been helping struggling business owners for over 20 years with sensible FREE advice. If your hospitality business is experiencing problems, contact us FREE on 0800 9700539. Chat to one of our experienced advisers and we will see how we can help you!

Written by Luke Harris

Table decorated with glass vase with fresh flowers and cup of drink located in outside cafeteria in daytime

Over 41,000 hospitality venues prepare outdoor space for April 12th reopening

beer gardenMore than 41,000 pubs, bars and restaurants have sufficient outdoor space to enable them to reopen in 2 weeks’ time. In the latest monthly market recovery report, by CGA and AlixPartners, figures show that 38.2% of licensed premises in the UK say that they have space outdoors which will allow them to trade when lockdown rules are eased on the 12th April.

Many businesses have stated that they are planning to utilise gardens, terraces and even car parks to potentially seat guests to reopen when al fresco hospitality is given the green light to go ahead by the Prime Minister. However, the number of operators able to operate outside varies drastically depending on their specific area of hospitality.

The report said that more than 80% of community pubs have appropriate outdoor space to reopen, whereas only 11.9% of casual dining restaurants have such space, meaning further damage to many chains which have been hit hard in the past year.

The report also showed that most sites with outdoor space will still be unlikely to trade from mid-April due to limitations to their space and cost of outdoor equipment or staffing them as it will be unprofitable. With south-west England having the best placed chance of survival with 51.1% of premises having outdoor spaces. Meanwhile, only 33.1% of operators in London have outdoor spaces they can use and only 22.9% of venues in Scotland will reopen from April 26 for outdoor areas.

Karl Chessell, business unit director for hospitality operators and food at CGA, said: “With huge pent-up demand for hospitality and consumers’ confidence rising, outside trading could give sales a useful kickstart – but there are a lot of variables at play. Pubs with beer gardens will be popular if the sun shines, but some restaurants may find it harder to recoup the costs of reopening, especially if the April weather isn’t favourable”. Mr Chessell added, “well over half of licensed premises have no space at all in which to trade, though they could yet reopen in April if local authorities take a proactive approach and open up street space for them to serve on”.

Hospitality Rescue has been helping struggling business owners for over 20 years with sensible FREE advice. If your hospitality business is experiencing problems, contact us FREE on 0800 9700539. Chat to one of our experienced advisers and we will see how we can help you!

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