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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

Bleak GDP figures highlight damage to UK’s hospitality sector.

New figures have been released showing the extent to which the hospitality sector plays an important part in the UK’s economy. Statistics published by the ONS (Office of National Statistics) shows that the UK economy shrank by 9.9% in 2020 with the output of the accommodation and food services sector now down 51.8% on the previous year.

In addition, analysis from hospitality data analysts CGA, showed a 54% drop in sales across hospitality in 2020, which is the equivalent to a drop of nearly £72bn, making the hospitality sector responsible for one-third of the UK economy’s annual £215bn contraction. This demonstrates how important it is to get the hospitality industry back open again as quickly as possible and pumping money into the British economy. However, after the PM’s latest announcements on the roadmap for recovery, it is now clear the earliest signs of this industry being able reopen will be mid-April/late May, which may be too late for many hospitality businesses.

UKHospitality Chief Executive Kate Nicholls said “these figures make for bleak reading, but also serve to drive home the point about the importance of hospitality as an economic force. When hospitality struggles, the entire UK economy struggles”. She has emphasised continuously, time and time again, the importance the food and drink industry has on the UK economy.

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!

Will Pubs and Restaurants Open in May?

With many of us questioning when pubs and restaurants will be opening again, there is finally some light at the end of the tunnel. The government has released a new roadmap for recovery introducing step by step details on what will open and when bringing optimism for the people of the UK.

The Daily Mail states that a ‘blueprint’ is being discussed by ministers and industry leaders that would allow the current restrictions to be gradually eased at four-weekly intervals however, some believe that this four-week interval could be cut down to three weeks, as this is the time it takes for the data to demonstrate the effect of the loosening lockdown measures.

The Mail says that pubs, bars and restaurants will have to wait until early May before they can open their doors again to the public although, rules will be put in place to ensure the safety of the customers. Plans to have a maximum of two households being allowed to sit together indoors have emerged (an increase from the previous one family/household rule prior to the lockdown) and plans suggest a continuation of the ‘Rule of Six’ outside. Is this the future of pubs and restaurants? Hopefully not, with the next stage of the blueprint rolling out in early June we can hopefully see an easing of the ‘Rule of Six’ maybe indoors. The sector is desperate to get confirmation of these proposals so it can plan for a vital busy summer trading period.

Although this is a positive step for many businesses, can they really afford to wait another 8-10 weeks to open? Many owners of pubs are calling for an earlier reopening launch after businesses warned that they would go under unless they were given the green light to get going from the Easter weekend.

The Hospitality Rescue team has been helping owners save their businesses for 20 years with sensible free advice and a range of survival strategies. So, don’t hesitate to contact us now if you’re hospitality business is facing problems. Give us a free call on 0800 9700539 to chat to one of our advisors.

Written by Luke Harris

A new report argues the hospitality sector not a significant area of COVID transmissions

Late last year the hospitality industry was targeted as being responsible for an increase in COVID-19 cases. However, a new report argues that businesses in this sector should be prioritised for reopening, as research shows that they are NOT a significant area for COVID transmissions. A study, commissioned by trade body UKHospitality, from analysts CGA, asserts that hospitality should be central to early reopening plans in 2021 as it continues to be “a safe and well-regulated environment for customers to visit”.

After constant arguments over the July 2020 reopening of hospitality, the ‘Eat Out To Help’ out scheme and the so called correlation of a rapid rise in cases in autumn 2020, reports from public health directors and Public Health England’s weekly surveillance reports, both conclude that hospitality was linked to a low number of cases and is not a leading environment of transmissions that was previously thought. In fact, data suggests that, the rapid rise in cases from early to mid-September was mostly likely driven by the forced reopening of schools.

With data covering the period from 9th July to 19th September 2020, the busiest period for hospitality by far since the pandemic began, shows an average of only 5.2% of infection could be linked to “food and drink“ industry settings, therefore pubs and restaurants should not be held back from reopening. The report urges that consideration of the current reopening roadmap that is understood to prioritise the reopening of non-essential retail before hospitality should be reviewed.

So it’s clear, the hospitality sector is in fact not as much at fault for the increase in cases but actually safer than critics felt.  The report says that far more needs to be done to save this industry which has left many businesses barely surviving and the sector most definitely cannot afford another year with restrictions on the scale of 2020.

The Hospitality Rescue team has been helping business owners for 20 years with sensible free advice. If you are in the hospitality sector and are, like so many others, suffering financially, don’t hesitate to contact us now.  Give us a free call on 0800 9700539 to discuss how we can help.

Written by Luke Harris 

‘Swift’ support package needed as operators deal with ‘flood of cancellations’

Hospitality trade bodies are calling for a speedy support package for the industry after further restrictions announced on the weekend have left operators dealing with a “flood of cancellations”.

Hospitality businesses in Wales were closed on Saturday and it was announced that businesses would be closed in mainland Scotland from Boxing Day, while London and other areas recently put into Tier 3 were put into a new fourth tier, meaning residents will not be able to leave their areas or mix with other households even on Christmas Day.

Home Grown Hotels and Lime Wood Group hotelier Robin Hutson tweeted that the cost of the Tier 4 announcement to his hotels was in the region of £500,000.

Andrew Grahame, chief executive of the Farncombe Estate in the Cotswolds which includes Dormy House, Foxhill Manor and the Fish, tweeted that it had “devastated” business, and although the properties were full for Christmas on Saturday morning, by the evening occupancy was down to 30%.

He added: “Furlough is not enough.”

Managing director of the Vineyard Group Andrew McKenzie said on Twitter that more government support and compensation were needed “to keep businesses afloat and as many jobs as possible intact”, adding that having three closed hotels in Tier 4 “is bleeding us dry”. Restaurateur Mitch Tonks said without guests travelling west from Tier 4 “we are dying on our feet”.

Even businesses in Tier 1 have said they are struggling due to the Christmas period travel restrictions. The Hambrough restaurant and bar on the Isle of Wight, which is in Tier 1, said 90% of bookings have been wiped out over Christmas and New Year following the Tier 4 announcement.

UKHospitality wrote to the prime minister last week requesting a enhanced grants for English businesses, and a clear exit strategy from restrictions.

In an open letter to first minister Nicola Sturgeon, chief executive of the Scottish Tourism Alliance Marc Crothall quoted a hotel business which will incur losses of £600,000 because of the new restrictions.

The letter said: “Your subsequent announcement that restrictions will be tightened for the foreseeable future is clear and understood and is a decisive response to the health risk. The ask of the industry is that the Scottish government now delivers a similarly swift and committed response to the economic consequences of this action.

“An additional upweighted ‘extraordinary’ package of funding must urgently be identified from within the Scottish and UK budgets to support both our frontline businesses and the supply chains over what will now be a significantly more challenging period than any of us had previously understood or anticipated.”

Crothall added that “without a more equitable and upweighted level of support being made available quickly, it is likely that many more businesses will be forced into temporary or permanent closure” with operators now dealing with a “flood of cancellations and have lost much-needed revenue” due to the change in restrictions and forthcoming lockdown on Scotland’s mainland.

He said the scale of job loss will be “grave” without longer-term financial support and the scale of “damage and devastation” to businesses, local economies, communities and livelihoods will be “unprecedented without immediate, more meaningful, targeted and robust support”.

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