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Hard hit hospitality calls for further government support

Published:  17 December, 2021

As the hospitality industry continues to face a mounting crisis of cancellations and closures in the wake of Omicron and Plan B restrictions, UKHospitality chief executive Kate Nicholls has urged the government to step in and save many businesses from going under.

“Christmas trade is always crucial for the hospitality industry, making up as much as a quarter of the year’s profit for many businesses. Last year Christmas was cancelled and so much rested on this December period for businesses already staggering under a burden of debt incurred from the pandemic and facing rising costs across the board,” said Nicholls.

“If operators are unable to trade profitably over the next month, many will simply not survive - and those that do make it through face a return to 20% VAT in April. The Government must step in now and provide measures that support the businesses and jobs in the sector – by committing to keeping VAT at 12.5%, suspending business rates payments for the first quarter of 2022 and reinstating recovery grants.”

As widely reported in the UK media, scientist warnings about the risks associated with Omicron have severely dented consumer confidence, leading to a surge of hospitality cancellations.

Shoaib Malik, general manager at Kahani restaurant in Belgravia, told Harpers that “during the last six days Kahani has had 259 cancellations relating to Covid-19 and the new variant Omicron.”

He added: “We started receiving cancellations after Boris Johnson’s speech last week when he reintroduced working from home. The cancellations are very damaging to our restaurant and employees - it’s a constant worry if we will make it or go under.”

Prior to the emergence of Omicron and Plan B restrictions, figures show the industry was on track to reach 95% of pre-pandemic trade levels but consumer confidence has plummeted and businesses are facing unprecedented and catastrophic levels of cancellations.

Pubs, bars, cafés and restaurants have already seen trade fall by a third and are expecting a further 22% drop in bookings for December, according to UKHospitality, while nightclubs have fared even worse with revenue already down by a quarter.

“We have had 500 cancellations within 24 hours of the announcement and just under 1,000 cancellations in the last two days,” said Calum Mackinnon, co-founder of Sixes, the world’s first social entertainment cricket venue.

“It’s crippling. The government should be providing targeted relief for hospitality - more rates relief, VAT cut and grants based on rateable value. Hospitality relies on a busy Christmas period to get us through a tough January so this is going to be a very tough eight weeks ahead."