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Industry estimates 750,000 job losses without ‘appropriate support’

Published:  19 October, 2020

Hospitality faces 750,000 job losses without urgent government support, according to the latest research conducted by CGA for UK Hospitality (UKH), the British Institute of Innkeeping (BII) and the British Beer & Pub Association (BBPA). 

The findings from the survey of the trade bodies' members paint a grave picture, with more than three quarters (76%) of businesses saying they were loss making.

Moreover, with the survey reflecting views largely canvassed before the full impacts of the lockdown Tier system were announced, it is likely to be an under-estimation of the “acute difficulties of the sector’s immediate prospects, unless new government support is forthcoming”, said the trade bodies. 

The survey said that by February 2021, over 750,000 jobs will be lost against employment figures from February 2020 without further government support on the back of furlough ending 31 October and the new Job Support Scheme (JSS) “not viable for most hospitality businesses that have seen their cash flows decimated since restrictions have increased”. 

Nearly 50% of respondents believed that the restrictions in place will reduce their turnover by at least half this winter, with the prediction for total business failure by the end of 2020 now estimated to be more than one in four, according to the survey.

Over 50% of businesses are now expected to fail before the end of Q1 in 2021, it stated.

The trade bodies also reiterated that businesses in the Medium (2) and High Risk (3) tiers are in “no man’s land”.

“There can be no doubt of the devastating impact that the government’s restrictions are having on hospitality and pub businesses across the UK,” said a joint spokesperson for the trade bodies. 

“Without urgent sector-specific support for our industry, massive business failure is imminent and hundreds of thousands of jobs will be lost around Christmas from a sector that was in growth at the beginning of this year, as well as in the supply chain that supports them.

While there are any restrictions placed on hospitality and pubs, there must be financial support in place across all tiers of risk.”

To help the beleaguered industry, the trade bodies are calling for an immediate, sector-specific extension of the JSS with no employer contribution until restrictions are lifted for all tiers; Government Disruption Grants to be made available for all venues, across all tiers and a review of any restrictions placed on venues must take place at least every two weeks.

“Safeguarding hospitality venues against business failure is the priority and without these measures in place, the hospitality sector will not survive to provide the employment and tax revenue that will be needed for a safe and sustainable recovery in 2021 and beyond,” they said. 

On Friday, Kate Nicholls, CEO of UKH warned that 200,000 hospitality jobs could be lost over the weekend in central London as new Tier 2 restrictions were implemented.