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One-month delay to restrictions lifting would cost hospitality £3bn

Published:  14 June, 2021

UK Hospitality (UKH) has warned that a one-month delay to Covid restrictions lifting would cost the hospitality sector around £3bn in sales.

The warning comes amid expectations that Prime Minister Boris Johnson will today (14 June) delay lifting final restrictions for at least four weeks.

Any delay would be “devastating”, for the sector with around 300,000 jobs put at risk – including those still on furlough, said UKH. 

A four-week delay would also have a knock-on impact on bookings throughout the summer and into the autumn, the trade body added.

“The government has a balance to strike but due to the amazing efforts of the NHS in rolling out vaccines, it is time to lift the restrictions that are crushing businesses,” said Kate Nicholls, CEO, UKH.

“A full and final ending of restrictions is the only way to ensure that businesses in this sector can trade profitably. If government decides it has to keep some restrictions in place after 21 June, then it must prioritise those that do the least damage to business and commit to further supporting the sector,” she said.  

Alongside the impact on revenue, companies are now also facing a jump in costs with business rates payments set to recommence alongside employer contributions to furlough kicking in.

Nicholls said: “Confidence has been shaken so it is imperative that government postpones business rates payments until at least October and extends the rent and debt moratoria for hospitality businesses while a long-term solution to Covid arrears is found.

“Businesses need a swift, publicly-stated commitment that such support will be in place in the event of any delays, giving them much-needed reassurance after more than 15 months of closure and severely disrupted trading,” she said.

Hospitality has been one of the hardest hit sectors during the crisis, losing more than £87bn in sales, leaving businesses deeply in debt and are at risk of suffering “economic long Covid” if the right support is not forthcoming. 

Even now, with partial reopening, sector sales remain down 42%.

Sales across Britain’s managed bar, restaurant and pub groups dropped 26% drop in May compared with the same month in 2019, according to the latest edition of the Coffer CGA Business Tracker.