Many were dismayed with the news that the UK covid restrictions were going to continue for at least an extra four weeks. Whilst this might have been a good decision in terms of the safety of the public and limiting hospital admissions, it seems to have come as a real disappointment for the hospitality sector. Many venues have not been able to open for months and it is unclear how much longer they can survive without the cashflow that footfall brings. This article looks at the current state of the hospitality sector and what support is still there for them.
How Have The Lockdowns Affected The Hospitality Sector?
The Hospitality sector is a bit of a microcosm of the UK economy as a whole, which has shrank by more that 10% since the beginning of the pandemic. Hospitality has been hit harder than many other industries because of the fact that it relies so heavily on footfall. Whilst other sectors have moved their business online, for venues such as nightclubs this is impossible.
Indeed, it is thought that 1 in 4 hospitality venues have had to remain shut and many of those that have opened are operating at a loss. This is partly why this latest extension to the lockdown restrictions has come as such a blow to the sector. It is thought that this extension could cost the Hospitality industry roughly £3bn. Many establishments have already bought stock, sold tickets and hired staff in preparation for the reopening which will now go to waste.
What Government Support Is Available?
One of the main factors that has caused anger for the Hospitality industry is the fact that the extension hasn’t been accompanied by any further support from the UK Government. Industry leaders have pleaded for additional support, but it looks as though the UK government believe that the support they already have in place is sufficient.
In fairness, all the current support will stay in place. This means that the sector will continue to benefit from the reduced VAT rate of 5%. This initiative was extremely well received when it was first announced. On top of this the Recovery Loan Scheme and the furlough scheme are still available for business owners to use.
However, there are certain things that the government could do in order to help these businesses. One example is the fact that the government payments for the furlough scheme were set to begin tapering off in July. It would obviously be a big help to these businesses if this date was pushed back by a month or more.
There may be more support available to these businesses that they have not yet taken full advantage of from their local councils. You can find our article on this additional support here, with instructions on how to apply also.
Conclusion – The Pandemic Is Still Taking Its Toll On The Hospitality Sector
As you can see, there is still some way for the hospitality sector to go before it has completely recovered from the pandemic. Hopefully, the government will announce some further support in the coming weeks, or at the very least an extension to the current support.
Is your business struggling with the implications of the pandemic? Why not contact us so we can help?
At J&P, helping small businesses is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the Coronavirus crisis and to keep you up to date with all the latest Government guidance and support, so please do not hesitate to give us a call on 07734182821 or send an e-mail toenquiries@jpaccountant.com to receive help managing your business through the end of lockdown.
