£4bn loss predicted for the hospitality sector

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14 December 2021

  • GO! Southampton joins call for urgent financial assistance for the UK’s hospitality sector following announcement of Plan B.

  • Financial support can be provided by redirecting surplus funds from The Additional Restrictions Grant or by introducing a new discretionary fund, or both.

The UK’s hospitality sector is bracing itself for a £4bn hit in festive sales with the new ‘work from home’ directive threatening the UK’s hospitality sector this Christmas. Hospitality bosses believe reintroducing the ‘work from home’ guidance is diminishing consumer confidence, resulting in widespread cancellations of bookings during the critical festive trading period.

GO! Southampton has joined the call on behalf of the UK’s hospitality sector for urgent financial support to soften the blow to Christmas trading from new COVID guidelines by redirecting unspent grants available to the sector or by introducing new alternatives such as a discretionary fund to be administered by local authorities.

This call is further backed by British BIDs, The BID Foundation, Night Time Industries Association and the Association of Town and City Management who together collectively represent over 100,000 hospitality businesses.

Kate Nicholls, CEO, UKHospitality said, “The measures announced last week will significantly impact consumer confidence and be particularly devastating to city and town centre venues. As such, they risk devastating the hospitality sector amid its most important time of the year. We therefore desperately need support if we are to survive this latest set of restrictions and urge the government to stand behind our industry. That means full business rates relief, grants, rent protection and extended VAT reductions. Anything less would prove catastrophic.”

Giles Semper, Executive Director of GO! Southampton said, “Throughout the pandemic hospitality businesses have ultimately suffered most. They have been closed more often than other businesses, subject to greater restrictions and have often been the last to receive financial support. The latest Plan B restrictions look set to hit them again in the crucial run-up to Christmas, with work-from-home restrictions in particular threatening Christmas parties and reducing customer confidence. We urge government to meet business halfway and introduce financial support such as a discretionary fund or the repurposing of The Additional Restrictions Grant fund and allocate to businesses most affected during the busiest time of the year. Without it, we can expect new closures on our high streets.”

Annaliese Hughes, Managing Director, Mustang Group: “‘The impact on the hospitality sector cannot be underestimated especially during a period where we’d seen much needed revenue growth.  The current messaging risks frightening the public into confusion once again; and whilst we may not be told to close our doors it feels once again like we are left out in the cold fighting for survival with no financial support. Whilst there are still funds in unspent ARG pots this should be immediately repurposed for those businesses hit hardest”.

Gary Bennetton, Owner, Orange Rooms & Switch: “The doom-mongering of the last week has already taken its toll on our Christmas trade even before the announcement of Plan B restrictions.  It is therefore no surprise that Plan B threatens to be an absolute disaster for the hospitality sector and further dampens already-fragile consumer sentiment.  Our sector will be strangled without further economic support.”

Ross McNally, Executive Chairman, Hampshire Chamber of Commerce: “Exhausted employers have had nearly two years of trying to navigate this pandemic and thanks to their resilience, imagination and sheer hard work, many have begun to recoup losses, stabilise operations and turn their prospects around. Now, with these latest measures and the speed with which they are to be implemented, there are bound to be impacts on consumer and spending behaviour with a consequent risk to business confidence.

“It is therefore absolutely essential that the government now redoubles its efforts to provide a package of business support measures to help avoid more economic damage.”

Bill Addy, Chief Executive, BID Foundation: “As businesses shift to working from home guidance and those affected absorb the impact of new restrictions, we once again have to point out to this Government that it is those industries who have borne the brunt of restrictions over the past 18 months who are being asked to do so again. Christmas is a crucial time for organisations within the city as people visit theatres, music venues, concerts and more. Culture, arts and entertainment lost 20% of its sector GVA due to COVID restrictions, with my region Merseyside one of the worst regions affected. This sector is a major employer in our country and a vital partner for hospitality. The loss of income affects jobs, venues and risks us starting 2022 a step behind. These venues being forced to change their guidance to audiences deserve support for any loss of income.”

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