On-trade faces ongoing cancellation crisis as weekend takings plummet

By James Lawrence

Published: 21 December, 2021

New figures released by UKHospitality indicate that a normally buoyant – and vital – month is set to be a disaster for the hospitality sector.

According to survey data from the industry body, weekend hospitality sales plummeted by 40% across the UK, amid fears of another lockdown.

Over half (54%) of venues were down more than 40% in revenue last weekend, with one in five businesses reporting a crushing sales drop of more than 60%. On top of these bleak trading figures, 88% of operators said they feel negative about the potential of New Year’s Eve trading and four in five operators have already experienced cancellations for bookings in what was already set to be a quiet Q1 next year.

A separate survey, undertaken by the Tourism Alliance, showed that a third of pubs, bars and restaurants have no cash reserves and 10% of pubs and 14% of restaurants are therefore very likely to fail, with consequent job losses.

Accommodation businesses are only slightly more resilient with 22% reporting no cash reserves – 47% with less than 2 months’ worth – with 26% at risk of failure in the next year without further support; Chancellor Rishi Sunak has pledged extra funds for ailing businesses in the sector.

UKHospitality chief executive, Kate Nicholls, said: “Hospitality operators desperately want to keep their doors open and trade their way to recovery, particularly during the Christmas period, which is not only key for balance sheets but for the communities and people our businesses serve. However, these catastrophic figures clearly show that trading levels are now so low that without Government support many businesses will not survive into the New Year and jobs will be lost. Cancellations have annihilated cash reserves.”

She added: “The industry urgently needs grants for short-term business survival and an extension to business rates relief and the lower VAT rate to secure longer term survival and planning. It is also crucial that the Government lets the industry know as soon as possible if measures are to be imposed and what they might be, to allow for as much damage limitation as possible."

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