Lengthy and Painful Recovery for the Hospitality Sector

Hospitality businesses are predicting a lengthy and painful recovery with levels of trade expected to be significantly supressed for many months to come, according to a new survey of its members by UKHospitality. The findings paint a gloomy picture of low expectations with responses received from a range of different operators. The trade body is calling on the government to urgently confirm 4 July as the date the hospitality sector reopens and for it to make renewed commitments on extended support for the sector, in order to prevent widespread business failure and further job losses. Respondents were asked to give their expectations on trade in the three months following reopening and in December, a vital revenue-generating month for the sector. They were also asked about the difference in trade between having a one-metre social distancing rule versus two metres.

Overall, hospitality businesses overwhelmingly expect a very slow recovery in the second half of 2020, with a “worst-case scenario” in December of trade at about a third of the previous year’s level if the two-metre rule remained in place. Even at one metre, trade is only expected to be at just over half the level compared with the year before. For restaurants, the figure was 45% of last year’s trade at one metre and just 26% of 2019 levels at two-metre social distancing. For pubs, the figures were 52% and 29% respectively. The shorter-term outlook is yet more downbeat, with expectations for August at between a 78% and 65% decline depending on the level of social distancing required in venues. Restaurants expect to achieve 39% of last year’s trade at one metre and just 23% of 2019 levels at two-metre social distancing. For pubs, the figures were 44% and 26% respectively.

UKHospitality chief executive Kate Nicholls again called for the government to confirm a reopening date of 4 July for the sector “without further delay” and to adopt the internationally-recognised standard of one metre “if the current review on social distancing recommends it is safe to do so”. She added: “With trade forecast to be materially down for many months to come, the government must consider targeted support to help assist the sector’s recovery, such as a cut in tourism VAT and air passenger duty, support for missed rent payments during closure and the creation of an autumn bank holiday.”