Pubs, hotels and restaurants face ‘existential threat’

THE hospitality industry in the South West faces an existential threat if social distancing measures stay in place to the end of the year, a tourism leader has warned.

Businesses such as bars, restaurants and hotels will face a “catastrophe” if, as suggested by the Government’s chief medical officer, the rules to limit the spread of the coronavirus continue into 2021, says the chairman of Visit Devon.

Most would not be able to survive on the restricted trade that would be possible should social distancing conditions stay in place once the current lockdown is lifted, said Rhys Roberts.

The only way for the industry to survive would be if Government help continued long after reopening, he said.

“Without help for the hospitality sector, such as extension to furloughing, it would be potentially a catastrophe for the industry,” said Mr Roberts.

“We would be facing a real existential threat.”

While some businesses with low overheads might be able to survive on the limited trade under social distancing once lockdown were lifted, most could not.

“Businesses such as hotels, restaurants and bars, which have high overheads, would not be able to open and trade profitably because of their high overheads.

“Many owners would decide it would be less costly not to open. There would be substantial job losses,” said Mr Roberts, a hotelier in Tiverton in Mid Devon.

“We would fall back on the Chancellor’s promise to do ‘whatever it takes’ to support businesses and avoid wholesale bankruptcies and closures.”

Mr Roberts’ warning was echoed by Cornish MP Steve Double, who chairs the All-Party Parliamentary

Group on the hospitality sector, which has launched an inquiry into the way forward during and after the pandemic.

Mr Double said: “The hospitality sector is very important nationally and hugely important in the South West.

“Speaking to businesses, I know there are concerns about a partial lifting of the lockdown with the social distancing remaining in place.

“There are big questions how bars, pubs and restaurants would be able to handle that. If they cannot open fully for the same numbers of people they would not be profitable.

“It would be a disaster. Support for hospitality and tourism has to be maintained until the social distancing measures are completely lifted,” said Mr Double, the MP for St Austell and Newquay.

The trade association, UK Hospitality, warned yesterday that a million jobs would be lost in the sector if social distancing stayed in place without Government support.

After the statement by the chief medical officer, Professor Chris Whitty, that social distancing measures could last beyond 2020, the body wrote to Cabinet Office minister Michael Gove, recommending a plan to help the sector reopen following the crisis and save jobs and businesses.

The letter stressed the need for a phased approach to avoid a “yo-yo effect” of openings and closings which could see businesses fail and up to a million jobs lost.

The six-point plan sets out the level of support the industry needs. Recommendations include extending the Government’s furlough scheme beyond the end of June for hospitality businesses, legislative intervention on rent payments, improved access to capital and an overhaul of business regulation.

UKHospitality chief executive Kate Nicholls said: “With social distancing measures still in place, reopening the hospitality sector without a plan would be catastrophic.

“The hospitality sector was one of the first hit by the crisis and the hardest hit in terms of lost revenue. It will also be one of the last to fully emerge from the lockdown.

“An extended period of social distancing will mean that many hospitality businesses will not be able to operate fully, and many will not be able to open at all. Hospitality is a sector built around socialising, so there must be Government support for businesses that continue to be hit by this crisis.” There should be a phased approach so that those businesses that were able to trade safely with social distancing were allowed to do so.

Mr Roberts said related industries such as farming and food and drink supply would be affected by any big hit to hospitality and tourism.

Only businesses with low overheads, such as tea shops, pop-up restaurants and farm B&Bs, would be able to trade profitably with social distancing in place.

He warned that the industry as a whole faced challenges even after social distancing was ended. Older customers and holiday visitors would need reassurance before they started going out or taking breaks.

And, if even if businesses enjoyed continued Government support, they would face recruitment problems if closures lasted into next year.

It would be a potential catastrophe. We would face a real existential threat RHYS ROBERTS