Hospitality trade bodies UKHospitality, the British Institute of Innkeeping (BII) and the British Beer & Pub Association (BBPA) report mass redundancies and permanent closure of venues across the UK, without the appropriate package of support from government.
The findings, which come from a sector-wide survey of members of all three trade associations, conducted by research company CGA, paint a catastrophic picture as the new three tier system comes into force and has been extended to London, York, Lancashire and other areas, with further announcements expected imminently.
With furlough ending in just over two weeks, and the Job Support Scheme not viable for most hospitality businesses that have seen their cash flows decimated since restrictions have increased, the survey shows that by February 2021 over 750,000 jobs will be lost against employment figures from February 2020.
Nearly 50% of survey respondents believe that the restrictions in place will reduce their turnover by at least half this winter.
The prediction for total business failure by the end of 2020 is now estimated to be more than one in four. Over 50% of businesses are now expected to fail before the end of Q1 in 2021.
Businesses in the medium and high risk tiers announced by the Prime Minister are in no man’s land, the trade bodies say.
Without the benefit of furlough and government disruption grants, they will be under pressure to trade with an impossibly low level of custom, forcing them to make large sections of their staff redundant and to close their doors, potentially forever.
The trade bodies now urge government to urgently rethink the support offered to hospitality businesses across all three tiers, to avoid unprecedented levels of unemployment and business failure across the sector.
They say there must be an immediate, sector-specific extension of the Jobs Support Scheme with no employer contribution until restrictions are lifted for all tiers; Government Disruption Grants should 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.
A joint spokesperson for the trade bodies, said: “There can be no doubt of the devastating impact that the government’s restrictions are having on hospitality and pub businesses across the UK.
“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.”