Like most of us, the hospitality sector is bracing itself for further Covid related restrictions from the Government as the Omicron variant spreads across the UK. Currently, pubs and restaurants remain open, but the latest wave of the virus has unsurprisingly deterred consumers from eating and drinking out - reports of footfall being down and advance bookings cancelled are rife. Trading is also down substantially on pre-pandemic levels two years ago, at what is traditionally the busiest and most profitable period for the sector. UKHospitality, the voice of the hospitality industry, reported that more than half of venues surveyed by them suffered a decline in revenue of more than 40% last weekend. With the threat of forced closures coming into effect after Christmas and the December rent quarter payments soon due, it was becoming clear that further financial support from the Government was required.
The announcement of a £1bn support package by Rishi Sunak for affected businesses was welcome. Grants of up to £6,000 per premises will be available for short-term business survival. Whilst this amount will see some smaller businesses through to next year, given the Government’s one-size fits all approach, many larger hospitality businesses will continue to struggle.
The grant funding is based on the rateable value of the property:
In addition to the above one-off grants of up to £6,000 per premises, other measures announced were as follows:
- More than £100 million discretionary funding will be made available for local authorities to support other businesses.
- Government will also cover the cost of Statutory Sick Pay for Covid-related absences for small and medium-sized employers across the UK.
- £30 million further funding will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support during the winter.
To have real impact on the sector, further measures are required in the form of additional business rates relief and the reintroduction of the 5% VAT rate for hospitality.
We hope that the Omicron wave fizzles out quickly so that the uncertainty affecting businesses in the sector is short-lived. Hospitality operators need to ascertain, for instance, what stock levels are required based on forecast activity levels, so early communication of any further restrictions from the Government will be key.