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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”.

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!

Cap on business rates relief will jeopardise the industry’s recovery says UKHospitality

UKHospitality has warned that a cap on the amount of business rates relief that can be claimed by operators in England, could destroy the future of hospitality venues after they reopen. The 100% rates holiday has been extended until June by the chancellor however, businesses will have to pay two-thirds of their business rates bills for the remaining nine months of the financial year. On top of that, a £2 million cap on the relief available to businesses will mean a large proportion of the hospitality industry will be unable to make use of this discount.

UKHospitality has estimated that this will mean almost 8,000 businesses, which employ about 343,000 people will be paying full rates from July. A further 1,850 sites face the same issue before October. The cap will typically affect businesses with large sites, multiple venues or those paying high rents in areas such as city centres and on high streets.

Wales and Scotland have both extended their businesses holiday rates for retail, leisure and hospitality businesses for a further 12 months, making operators question the policy in England. UKHospitality is calling for the treasury to extend the 100% uncapped rates relief for a further three months beyond June, with a 50% discount for the remainder of the year.

“July is simply too early for businesses to be expected to start repaying rates after a devastating year of closure, restrictions and accumulation of debt,” said UKHospitality chief executive Kate Nicholls. “Hospitality stands ready to play its part in creating new jobs and boosting our communities across the country, but this policy risks strangling the recovery in its infancy.”

If you’re hospitality business can see a cashflow crisis looming, we can probably help. If you’d like to download a free copy of our cashflow forecast template you can do so HERE

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!

London Mayor investing £6 million to support re-opening of London’s economy.

Mayor of London, Sadiq Khan, has announced that £6million will be invested directly to supporting the re-opening of London’s economy once the COVID restrictions are lifted. This comes as a new report was released this week with details of the full extent of the challenges facing London’s economy.

Sadiq Khan has announced that in his mayoral budget there will be a new investment of £5million to support the eventual reopening of central London, including a brand new campaign to attract tourists and visitors back to London later this year. Through this LEAP (London Economic Action Partnership) a further £1million will now be spent on attracting people from all over the UK to visit the capital post-lockdown, vital for the much needed recovery of hard hit hospitality and cultural venues.

The investment comes as the Mayor publishes a final report conducted by Arup with Gerald Eve and the London School of Economics showing the future challenges and opportunities facing CAZ (London’s Central Activities Zone), which has seen a huge reduction in footfall due to the COVID-19 pandemic. As a part of the Mayors continuation of work, Sadiq has announced that London is joining forces with three other cities Berlin, Paris and New York to bring forward innovation that will speed up the reveal of central London and bring back businesses that were hit hard during the pandemic.

The Mayor of London, Sadiq Khan, said: “Central London is the engine of the UK’s economy. There simply won’t be a national economic recovery from COVID unless all levels of Government realise the crucial importance of protecting central London’s unique eco-system of shops, hospitality and world-leading cultural venues. That’s why I’m investing £6million directly in attracting people back into London once COVID restrictions are lifted”.

If you have a travel, hospitality or leisure business in London are in financial difficulties we can probably help.

Pubs and Restaurants scramble to create outdoor space

The UK government has allowed the reopening of al fresco dining in just three weeks’ time, on Monday April 12th. This has prompted a scramble for pubs and restaurants to create outdoor seating space, with restaurant and pub operators desperate to claw back revenues lost during lockdown.

Hospitality businesses up and down the country are planning to open terraces or expand on to pavement areas after ministers ruled that restaurants and pubs could serve customers ‘outside only’ in the first instance when they are allowed to open again on 12th April.

Last week pub company Punch said that it was investing an additional £1m in outdoor space, while landlord Cadogan, which owns large parts of Chelsea and Kensington, said that it was adding 500 seats to newly pedestrianised streets in the area. While some hospitality businesses are reporting higher demand for outdoor tables than when they reopened in July last year.

The River Cafe in London said it was almost fully booked for April with just a few weekday lunchtime slots available, while D&D, which runs 38 restaurants in London, Manchester and Leeds, said it planned to open the terraces at 20 of its sites amounting to around 1,100 places per sitting. It had already received 60,000 bookings up to the first week in May.

“We are well over double the number of bookings ahead of opening compared with when we opened last year, and last year we had the whole restaurant to book” said D&D chief executive Des Gunewardena. But, he added, the cost of reopening was in the “hundreds of thousands”.

The hospitality sector is versatile and creative, and many sites have already, or are currently erecting semi-permanent outdoor structures like awnings, canopies and marquees to cater for as many customers as possible when they finally reopen. The mood is positive and the sector should benefit from improved weather for the Spring re-openings, but all these changes come at an additional cost when the sector already has significant cashflow pressures.

Company 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

Manchester Food and Drink Festival has been confirmed to make its big return in 2021

The Manchester Food and Drink festival has been confirmed to make its big return in 2021, after having been postponed twice. The huge celebration of the region’s food and drink will once again be returning to the city’s cathedral gardens this autumn.

This popular festival will be centred around the free-to-enter Festival Hub, where tables can be booked in advance. Although the exact line-up has yet to be announced, last year’s festival plans had included a ‘feasting quarter’ of street food, kitchen takeovers, a live music stage and bar.

The festival is placed over 12 days this year, with the event taking place from Thurs. 16th Sept to Mon. 27th Sept., culminating with the MFDF awards. These awards recognise the best in the region’s hospitality industry and will be handed out at a Gala Dinner on Monday September 27. The glittering ceremony will move to Manchester Hall for the first time, promising to be a ‘hospitality homecoming’.

MFDF 2021 hopes to be able to support the recovery of the region’s dining and drinking economies by showcasing and celebrating as many businesses as it can as possible, however, only a limited number of bookable tables are available, with a reservation free of £5.

Alexa Stratton-Powell, festival director commented: “This year’s festival is about celebration, reflection and recovery. It has been an extraordinarily difficult time for the hospitality industry, and so too for the festival and all the events companies and professionals around the country.

“Postponing last year’s MFDF was a very difficult decision, but the right one.

“This year we’ll come together to do what Manchester does best – support each other and our city.

Andrew Kenny, UK MD of Just Eat, headline sponsor of the event, said: “We’re delighted that the plans for MFDF have been finalised and we can share the good news. We are really looking forward to celebrating with our customers, our local restaurant partners and the whole of Manchester at MFDF this September.”

Sadly, many hospitality businesses are unlikely to be at the event as the sector continues to suffer because of Covid lockdown restrictions. Premises with outdoor facilities can hopefully reopen on 12th April but many are still having to address legacy debts, unpaid rent and HMRC tax arrears.

Company Rescue has been helping struggling business owners for over 20 years with sensible FREE advice. Our newly appointed regional manager for Manchester, Adrian Ohio is ready and waiting to assist. If your business is experiencing problems, contact us FREE on 08009700539. Chat to one of our experienced advisers and we will see how we can help you!

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