Hospitality sector support needs ‘immediate’ boost

Government support for hospitality businesses in the UK must be “boosted immediately” and continue past the end of lockdown until the sector has fully recovered, UK Hospitality has urged.

UK Hospitality chief executive Kate Nicholls gave evidence at the House of Commons Treasury Committee yesterday (21 April) where she detailed the problems being faced by hospitality firms that have been severely impacted by the covid-19 pandemic.

While giving evidence, Nicholls welcomed the support put forward by the UK government so far, but highlighted several areas where it was not having the intended effect of supporting businesses, with many still struggling to access support while others were left out of schemes.

One example delivered by Nicholls was the Coronavirus Job Retention Scheme, which sees the government pay 80% of wages for employees unable to work during the pandemic from March to June. Nicholls said that while an extension to the scheme last week was welcome, an estimated 350,000-500,000 hospitality workers were missing out as they were seasonal workers, or had been hit by technicalities, such as new starters and being unable to produce a payslip.

Nicholls also expressed how companies have been “frustrated” by loan schemes, with some banks refusing to lend to hospitality businesses. A survey of UK Hospitality members showed 50% of businesses had applied for a loan but only 18% of those that had applied were granted one, with 58% still awaiting a response.

Furthermore, 71% of UK Hospitality members have had insurance claims rejected, while fears over rent remain unless an extended moratorium is granted.

Huge challenges ahead

Nicholls said: “Government support for businesses has been swift and it has helped many businesses get over the initial shock of the crisis. It is clear, however, that too many businesses are struggling to access support and that the schemes in place must be extended and enhanced.

“Hospitality was the first sector to be hit hard by the crisis and it will be one of the last to make a recovery. Even when lockdown measures are lifted, our sector faces a huge challenge in getting customers back through their doors and finding solutions to social-distancing measures that are likely to be in place.

“Business support needs to be boosted immediately to make sure that every business that needs it can access it. Scrapping thresholds for grants and support with rents will keep businesses alive and keep jobs open.

“This support then needs to be carried over after the worst of the crisis has passed. If it is abruptly switched off, then all the good work that has been done during these difficult weeks will be undone. Hospitality is going to be battling with the effects of this for months, if not years, and support from the government cannot be stopped until businesses are back up to full strength.”


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Author: Melita Kiely {authorlink}