UK hospitality facing a ‘bleak winter’, Nicholls warns

UK hospitality businesses are facing “a bleak midwinter” following the latest calls to reduce socialising, UKHospitality’s boss Kate Nicholls has warned – as the Chancelleor prepares to meet representatives of the sector. 

Speaking on TalkRadio this morning, Nicholls said it was the “cruellest of ironies” that while the UK was not technically in a lockdown, the current situation was seeing people stay away from the pub and restaurants, with many people cancelling their Christmas parties.

“This comes after 22 weeks [sic] of very restricted trading that our members have faced, ten months which they were closed fully followed by ten months wheree they were not able to trade fully so making heavy losses across that period,” she said.

“We were just starting to get back on our feet so it is the cruellest of ironies that now we have this situation while we’re not closed, we have minimal restirciotns in hspi itself, but the work from home order combined with the general messaging around Omicron is meaning that  people are staying away from hospitality businesses, this is particularly acute in the City of London and central London but across the we are seeing cancellation of Christmas parties. More worryingly we are seeing significant reductions in the normal walk in trade, normal scocialing, so it is having a very dramatic effect on our busineses.”

She said the changes had started to be felt as soon as Omicron emerged and had steadily got worse, pointing out that this time last year, hospitality businesses were able to take advantage of full furlough measure, business rate relief and  5% VAT rates, as well as cash grants.

“We have none of those at the moment. Business support in form of VAT and business rate relief is tapering off and businesses are facing a very bleak winter as a result.”

40% of profits across the sector are taken between Halloween and New Year, Nicholls said.

She added that UKHospitality was talking to ministers, the Tresury, Defra and other officials to make ministers were aware of the steadily worsening situation.

“Those profits we make in these crucial weeks are what needs to get us through – even in good times – January and February when trade turns down. It will dire for those businesses  if we dont’ get some immediate support to them.”

She said longer term support was particualarly important – crucially the VAT and business rate relief, and appealed to local authority to get discretionary grants to businesses that need it most.

In July 2020, the 20% VAT rate was cut to 5% before increasing rising to 12.5% in March this year to 12.5%, however the current discount is due to run out in April.

Her comments come two days after The Guardian reported that UK restaurants and pubs feared a 40% loss in takings over Christmas due to the new ‘plan B’ rules.

The Office of National Statistics today published data showing that the average number of UK seated diners in the seven days to Monday dropped to just 2% higher than in the same week in 2019 – its lowest level since the industry reeopening their doors to indoor dining in May.