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No plans for another ‘Eat Out To Help Out’ scheme.

Recent reports suggested that Rishi Sunak was considering a reintroduction of the popular ‘Eat Out To Help Out’ scheme to the hospitality sector when pubs and restaurants are able to re-open, hopefully from 12th April. The scheme which ran through August last year gave diners 50% off their food bill up to £10 on certain weekdays. Food and non-alcoholic drinks were included but the scheme excluded alcohol.

However, it appears the Chancellor has had a change of heart. Speaking at a recent treasury select committee meeting he said that there were currently no plans to bring back the scheme because high streets will “spring back” after lockdown. He continued that he felt that families were keen to go on a spending spree having saved an estimated £180bn during lockdown and that discount enticements would not be necessary.

He told MP’s there was a huge pent-up demand ready to explode once lockdown restrictions ease and that consumers would be more confident to spend this time round saying “there was an enormous worry when things reopened last year that people wouldn’t have the confidence to spend even though they had the income to”.

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!

Over 150 London pubs, bars and restaurants closed in 2020

The latest figures show that the coronavirus pandemic continues to wreak havoc on the hospitality sector as more than 150 pubs, bars and restaurants in London closed permanently last year with the number of licensed premises in the capital shrinking 4.5 percent in December compared to 2019. That represented a drop from 3,460 venues down to 3,303, meaning 157 sites closed their doors for good between Christmas 2019 and the end of last year. 

Birmingham and Leeds were the only other major British cities to suffer a larger percentage drop than the capital. With Birmingham losing 8.5 percent while Leeds losing 5.6 percent of sites, respectively.

In total 5,975 licensed premises closed their doors last year across Britain according to the latest research by data analysts CGA and consulting firm AlixPartners. Closures are close to triple the 2,171 recorded in 2019, highlighting the massive impact the pandemic and restrictions have had on trading within the hospitality sector.

Experts had warned that the restrictions put in place throughout December will “undoubtedly have caused more business failures” (in early 2021). The question many are asking is  “Yes, but how many?”.

“Businesses, their funders, landlords and other stakeholders urgently need certainty and a roadmap to reopening” AlixPartners director Graeme Smith said. He added “the rapid rollout of the vaccine offers hope, but with restrictions unlikely to be lifted until Easter at the earliest, the coming months will likely see more sites lost for good”.

Emma McClarkin, chief executive of the British Beer and Pub Association, urged the government to back the industry. She said, “Given this latest evidence showing how the Covid crisis and lockdown is ripping pubs away from their communities for good, it is more important than ever that the government backs our local pubs and brewers”.

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!

Hotels wait patiently for recovery.

hotel

Like many others, the UK hotel industry has been impacted significantly by the Covid pandemic. In 2019, official figures (published by market data provider Statista) showed an average 75.4% occupancy rate in UK hotels (excluding London). Occupancy rates in 2020 were down more than a half to 37.6%. Predictions for 2021 show an average occupancy rate (excluding London) of c59%, an increase of nearly 60% on 2020 but still well down on 2019.

London hotel occupancy increased slightly in February compared to January, but coronavirus restrictions continued to bite. Figures from research agency STR show that London occupancy levels are currently at 23.3% down by 69.5% on February 2020. Average overnight rates in London were at £57.52 during February, down 57% on last year. RevPAR (revenue per available room) levels show January as the lowest on record.

Many hotel operators are facing substantial cashflow pressures and have been for some time. With the significant drop in revenue resulting from travel restrictions previously profitable businesses are struggling to stay afloat. As a result, many supply and contract companies who provide goods and services to the hotel sector continue to suffer too.

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!

Anger over Track and Trace lack of data use

Hospitality sector trade body UKHospitality is furious after a new report revealed check-in data from millions of people who visited pubs and restaurants before lockdown, was barely used by NHS Test and Trace.

The report obtained by Sky News, has admitted the failure of the £22bn service of the use of data alerts or the use of contact tracing which meant “thousands of people” were not warned that they might have been at risk of infection with COVID-19, “potentially leading to the spread of the virus”.

However, to make matters even worse, when the acquired data from hospitality venues was used, public health officials encouraged pubs and restaurants to contact customers directly which is a breach of data protection law, therefore potentially leaving businesses open to possible legal action. With the report suggesting lack of guidance from Test and Trace for local public health teams on how to use the data left businesses “being asked to, or volunteering, to contact customers and visitors themselves”.

UKHospitality chief executive Kate Nicholls said: “It is incredibly frustrating. Our teams worked really hard to capture that data on the understanding it was going to be used should there be problems. To hear it wasn’t used, and the fact we had further restrictions without really any clear evidence that there was a problem with hospitality, is a major cause for concern”.

NHS Test and Trace not only failed to use covid-19 data collected by venues, but it also failed to employ the QR code alert system built into the £40 million contact tracing app. According to the most recent Test and Trace figures, there were over 100m ‘check-ins’ to venues around the UK with the app, but analysis showed that the software instigated just 284 alerts from 276 venues.

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

Red tape must not get in the way of hospitality recovery!

The Government continues to offer whatever support it can to hospitality in order that it can slowly recover from the impact of the Coronavirus pandemic.

Housing & Communities Secretary Robert Jenrick has written to local authority council leaders around the country urging them to extend planning exemptions to those pubs, bars and restaurants wishing to set up al fresco dining areas.

Previously, hospitality owners needed to formally apply to their local councils if they wished to set up outside eating and drinking areas on pavements and areas around their premises. The process could be complicated and take weeks to be approved (or declined).

12th April is currently the target date for hospitality to reopen, but outdoors only. There will not be a requirement for customers to order a ‘substantial meal’ and no early closing, but customers must order, eat and drink outside, whilst seated. It wont be until 17th May, at the earliest, that indoor hospitality reopens. Many hospitality businesses, particularly in town or city centres are exploring ways of utilizing space outside their premises to enable them to reopen.

Robert Jenrick has told council leaders that local authority planning rules for al fresco dining and temporary shelters a must be waived (unless there are exceptional circumstances) until September 2022.

Writing in a Sunday newspaper the MP said “The planning changes we put in place last year have been a lifeline to many businesses and they’re here to stay for this summer”. He added “We will be extending pavement licenses for a further 12 months making it easier and cheaper for pubs, restaurants and cafes to continue to make al fresco dining a reality…”

Sunak throws lifeline to the hospitality sector.

After waiting over a week from the PM’s announcement on 22nd Feb, Chancellor Rishi Sunak yesterday finally revealed his annual Budget that many business owners across the country have been waiting for, detailing the extended help that they need.

Here are the bullet points that relate to the hospitality sector …

  • Furlough scheme extended until 30th September with the government paying 80% until the 30th of June, then reduced to 70% in July the 60% in August and September
  • Business rates holiday for eligible hospitality and leisure businesses extended until 30th June and then discounted by two thirds for the remaining 9 months of the year
  • 5% reduced VAT rate for businesses in the hospitality and tourism industry extended for another 6 months until 30th September, followed by an increase to 12.5% for a further 6 months. With the standard rate of 20% VAT not returning till April 2022
  • ‘Restart Grants’- Hospitality and leisure businesses will get additional grants of up to £18,000
  • All alcohol duty frozen for a further 12 months
  • Corporation tax remains at 19% until April 2023 when it will increase to 25% (on an incremental scale) but companies with profits of less than £50,000 will still only pay 19%

Many business owners will be happy today after confirmation of these measures. Here are just some of their thoughts on the news today.

British Institute of Innkeeping chief executive Steven Alton said: “With the package of support from government laid out, our pubs can begin to look to the future of their businesses once more. The support announced gives our sector an opportunity to rebuild as it reopens in line with the government roadmap, however, any changes to the plan will need to be matched with appropriate support measures. I have no doubt customers will return to their local pubs at the earliest opportunity and once again, be given a fantastic hospitality experience.”

Philip Inzani, founder of Polo 24 Hour Bar in London, said: “It’s generally a good Budget. The further extension to the furlough scheme is a huge help and will keep people employed for longer. However, the question arises that when employers have to contribute 20% in July, will sales have recovered enough in order to sustain this increase? This pandemic has shown the fragility of the hospitality industry and how we are reliant on very tight margins. This needs to change for our sector to fully recover. We need a long-term plan.”

Rishi Sunak said: “I said I will do whatever it takes. I have done and will continue to do so.”

The economy is expected to return to pre-covid levels by the middle of next year, but Sunak said repairing the damage will “take time”. He said the economy will be 3% smaller in five years than it would have been. He added: “The Office of Budget Responsibility forecasts our economy growing this year by 4%, by 7.3% in 2022, then 1.7%, 1.6% and 1.7% in the last three years of the forecast.”

Whilst this is all positive news many hospitality businesses will now be focusing on reopening and that brings its own problems. Many have rent arrears, supplier debts, tax liabilities and bounce back loan repayments to address and the combination of all these issues means more financial pain for the sector.

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!

First UK lockdown cost hospitality and high street £45bn

Researchers estimate that the first UK lockdown cost the UK hospitality and high street businesses £45b in turnover. A study undertaken by the universities of Cambridge and Newcastle used data from the ONS (Office for National Statistics) to compare retail, hospitality, and online sales within the UK from March to August 2020 compared to figures from the same periods between the years of 2010-2019.

The shortfall for hospitality sectors such as bars, pubs and restaurants were “dramatic”, said researchers, with the first lockdown causing sales to fall by as much as 90% below the usual business level, totaling around a £25b loss in revenue. However, hospitality sales saw some recovery post-lockdown due to schemes such as ‘Eat Out to Help Out’ but revenues were still down 25% compared to usual end of summer sales.

Sales in ‘food and beverage services’ suffered the most in terms of revenue loss. In February 2020, turnover was £5.7bn, which is just shy of the usual £6b business estimates. But by March this figure had slumped to £4.3b which is 2.4b less than the predicted £6.7b.

“Understanding the monetary impact of the pandemic is important to gauge the magnitude of the damage and can help the government design policies to assist these sectors” said Dr Luca Panzone from the university of Newcastle, who co- authored the study with Dr Shaun Larcom and Dr Po-Wen from the university of Cambridge.

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!

Lower alcohol duty for pubs and restaurants?

Boris Johnson has confirmed that the Chancellor of The Exchequer is considering rolling out lower tax rates on alcohol duty for pubs and restaurants, rather than for supermarkets, as Rishi Sunak prepares to unveil his budget tomorrow (3rd March).

Many Tory MP’s have backed this plan, urging the government to treat pubs and restaurants much differently than large retailers to stop them being “undercut by cheap supermarket booze”. MP Giles Watling stated, “This terrible pandemic has made things even worse but part of the problem is undercutting by cheap supermarket booze”. As the UK is now out of the EU the government should be able to do as they please on beer duty meaning cheaper prices for businesses and for the consumer.

After Boris Johnsons announcement of a pathway to reopening of hospitality last week, many were calling for more additional support to allow these business to survive rather than just be told they can open again and fend for themselves.

The Daily Mail reports that Rishi Sunak is set to announce further VAT and business rate cuts for the hospitality sector, continue the stamp duty holiday for house buyers and to also extend the job furlough scheme. It is also reported that Treasury officials are looking into even more dramatic pains for major stimulus to the economy later this year. There could be another return of last summers ‘Eat Out to Help Out’ scheme.

So, all in all, existing support packages which include the VAT cut from 20% down to 5%, an extension to business rates holidays and a further extension to the £50billion furlough scheme (all confirmed by ‘cabinet sources’) the government is finally looking at ways to protect the hospitality sector and ensure its’ survival. It is apparent that there is broad agreement that these support packages need to go hand in hand with the lockdown exit roadmap.

Many hospitality businesses are however on their knees, with lengthy lockdown closures resulting in little to no income, meaning that cashflow has suffered dramatically and many are simply struggling to keep their heads above water.

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!

Rapid Covid-19 testing could mean the reopening of nightclubs.

With nightclubs closed for almost a year now and the younger generation reminiscing over past club nights out, there may finally be a solution for this long-awaited industry to open up again. Boris Johnson has stated that quick coronavirus testing could enable nightclubs and theatres to reopen to the public again.

The PM said, “rapid lateral flow tests could be used by those parts of the economy we couldn’t get open last year”. Combined with the vaccination roll-out, this could well be the route forward for the sector. However, he stressed that it was still early days, with many more discussions still to be had.

Although this isn’t a definite yet this new statement brings some optimism to one of the hardest hit industry’s since coronavirus started. With the ease of lockdown being “cautious but irreversible” this gives some positivity to these businesses knowing there won’t be any going back after current restrictions are slowly lifted.

However, undergoing Covid lateral testing to gain entry to a nightclub may not be as simple as it seems. Michael Kill, boss of the Night Time Industry Association, said “administrating rapid tests would not be straightforward, even if it could mean venues such as night clubs were allowed to reopen”. He said that professionals would be required to administer these swab tests outside a venue, where clubbers would have to wait at least 15 minutes to see if they got a negative result before being allowed into the club. This therefore will lead to a stagger in admissions and would need certain procedures to deal with any positive cases and who those ‘positive result’ individuals may have been in contact with.

Sadly, the long wait continues for the night time industry and many businesses continue to suffer from lack of revenue and subsequently the means to pay its fixed costs.

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

Roadmap to Reopening Hospitality

So, finally, the hospitality sector has target reopening dates to work towards. Having waited patiently for weeks and months hospitality businesses can finally start to plan for their reopening. On Monday (22nd Feb.) Boris Johnson announced a long-awaited series of dates for returning to some sort of normality, split into four key steps with a minimum 5-week gap between each stage to be continually monitored:

  • STEP 1 Monday 8th March – Schools return, care home visits eased.
  • STEP 2 no earlier than Monday 12th April – Non-essential retail, personal care premises (hair and nail salons) can reopen. Indoor leisure (gyms and swimming pools), self-contained holiday accommodation and finally Hospitality can reopen (but only to serve people outdoors). Social distancing measures and other restrictions will however still be in place.
  • STEP 3 no earlier than MONDAY 17th May – Sees even more lifting of lockdown restrictions. Most social contact rules will be lifted, six people or two households can meet indoors, and indoor hospitality and hotels will be permitted to open
  • STEP 4 no earlier than Monday 21st June – in this last step all legal limits on social contact are to be removed and with the hope of reopening the final closed sectors of the economy which includes nightclubs and theatres.

This new roadmap will hopefully bring positivity for the people of the UK; However, these dates are not however set in stone, merely the earliest possible date that restrictions could be eased. There are minimum five-week barriers between each of these steps and barriers will only be raised if it is safe to do so. The government has four conditions that need to be met before each stage of lockdown is eased. The four conditions are that the vaccine programme continues to go to plan, evidence shows that the vaccines are reducing deaths and numbers requiring hospital treatment, infection rates do not risk a surge in hospital admissions and the new variants do not add to the risk of lifting restrictions. If all four of these requirements are met, then we are likely to see these restrictions lifted close to the minimum target dates set out in the roadmap.

Whilst this is good news for the hospitality sector for many pubs and restaurants that do not have outdoor facilities (including many city centre sites) it means a further wait of nearly 12 weeks. Sadly, many will fail during that period.

All eyes are on the Chancellors budget next week (3rd March) to see what additional economic support measures, if any, are announced.

 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

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