As we discussed in August (How will the hospitality sector bounce back?), pubs and hotels had a reasonably positive late summer thanks to the Eat Out to Help Out scheme and a larger proportion of holidaymakers deciding to take a British ‘staycation’.
But how will our hotels, B&Bs, pubs and restaurants fare now the autumnal weather has taken hold and the Chancellor has tightened restrictions on our social lives? UKHospitality, the trade body for the hospitality sector, called on the government to provide more support for the businesses hardest hit by the latest restrictions and warned that ‘job losses and business failures will be an inevitability’ unless more wide-ranging support is available.
Hospitality businesses will appreciate the extension of reduced 5% VAT, and the option of longer loan repayments will provide a little breathing room but as one business owner said, the latest measures are a sticking plaster, not a bandage.
A gloomy winter ahead?
The hotel industry always needs a strong summer of bookings to be able to take them through the usually quieter autumn and winter. Without the prospect of winter conferences in our big cities and a thriving Christmas party season to look forward to, the autumn and winter are looking decidedly gloomy for many businesses in the sector. Cash flow as we head to 2021 will be the biggest issue and businesses will have to weigh up whether they’re able to stick it out with the government’s assistance or are better off closing the doors for good.
To encourage us to take a winter break in the UK, VisitBritain launched its ‘Escape the Everyday’ campaign hoping that more Brits will decide to forgo some winter sun abroad and sample the delights of a home-grown holiday. As the uncertainty surrounding which countries are on the list for quarantine when you return, still bites, the UK will hopefully prove to be a popular alternative.
Unfortunately for many people, the economic worries about their job security may lead them to choose to save their money and hope for a holiday abroad in 2021. Each UK region has its own leisure and hospitality challenges – southern beach destinations aren’t so popular in winter, the Lake District may suffer from fewer older visitors coming to walk and enjoy the countryside and city centre hotels have seen a huge drop in business and overseas travellers.
Along with the shift back to working from home and the 10pm closing time, the end of the Furlough Scheme is the number one concern for bar and restaurant owners. The fact that the restrictions are to extend for six months is seen as another hammer blow to the sector. With almost 1 million people on furlough in the industry, UKHospitality is asking for more targeted efforts to support jobs and enable businesses to recover and rebuild in 2021.
Help is out there
Many establishments have taken advantage of the government’s Retail, Hospitality and Leisure Grant of up to £25,000, but that alone won’t see them through the slower season.
Another piece of good news is that the government has extended the Bounce Back Loan Scheme until 30 November 2020. This provides financial support (£2,000 – £50,000) to businesses losing revenue and seeing an interruption in cash flow due to Covid-19. Hospitality businesses also receive a break from business rates for the 2020/21 tax year.
Have you weighed up the best options for your business? With specialist knowledge and experience in accountancy for the hospitality and leisure sector, a CRM expert in the field can help to simplify the processes and highlight areas of assistance you might have missed while trying to stay afloat.
If you would like to discuss how we could support your hospitality business, please call Noel Heaven, our hospitality specialist on 01865 379272.