Scotland’s hospitality trade bodies (NTIA, SBPA, SHG, SLTA, UKH) have released joint survey results that show the dangers of an extension of vaccine certification for the sector.
A survey of more than 150 business owners and operators reveal the extent of the impact any extension would have on the sector, which is vital to local economies and the country’s tourism offer.
At the moment, 83.6% of businesses say that turnover is down by over 10% on pre-pandemic levels. If vaccine passports were extended to wider hospitality over three-quarters of businesses would not survive the winter without further Government support and almost all businesses (95.4%) would have to cut staff hours if trade reduced as expected.
The survey also found that only 1% of business owners say that they have unaffected the policy and 87% have seen their trade reduced by 20% since the introduction of the scheme.
In a joint statement, the trade bodies said, “From this survey it is clear to see that Scotland’s hospitality sector is in a precarious situation, making the recovery period all the more important. Four out of Five (83.6%) businesses are significantly below pre-pandemic levels and with inflation, debt levels and other costs rising, the sector is facing a very difficult winter ahead.
“The survey also shows that covid certification has a hugely negative impact on businesses already caught by the policy and any extension will have a devastating impact on the wider hospitality sector. Three quarters (76.2%) say they would not survive without further economic support from Government, should the policy be extended.
“It’s a similarly worrying picture for staff with over 95% of businesses saying that if trade reduced in line with expectations, they would have to reduce staff hours by the same or greater percentage as the loss of turnover. Given that turnover has reduced by 20% to 40% for businesses impacted by the scheme, this would be a devastating blow for the sector’s 100,000 workers just in the run-up to Christmas.
The Scottish Government must take this into consideration when making the decision on any extension of the covid certification and provide the economic support to keep thousands of businesses afloat.”
Ahead of Nicola Sturgeon reviewing Covid-19 restrictions in Scotland on Tuesday following SNP’s historic election win, UKHospitality has called for further financial support for the hospitality industry.
The latest figures in Scotland over the weekend showed 200 new cases and no deaths and Nicola Sturgeon is expected to give the go-ahead for the country to move into Level 2 from May 17 which will mean that alcohol can now be served inside hospitality venues. However, the First Minister will confirm that tomorrow and will also lay out any changes to the original plan.
The country is due to move down from Level 3 to Level 2 of restrictions on that date.
The latest hospitality sales tracker for the first quarter of 2021 shows that the last year has seen a two-thirds loss of trade for the sector – equating to a fall in revenue of £80 billion. Even now, only around a quarter of hospitality businesses have reopened with sales massively subdued due to outdoor trading being hit hard by poor weather. Data from CGA’s Drinks Recovery Tracker shows the crucial Bank Holiday weekend was a washout for many operators, and drinks sales on Sunday (2 May) were down by 35% on the same Sunday in 2019 and dipped even further on Bank Holiday Monday (3 May) – down 66%.
As a result, UKHospitality has written to Chancellor Rishi Sunak for further support for hospitality and has raised the concern that out that hospitality operators are reporting that banks are denying them access to critical funding.
In the letter to the Chancellor, UKHospitality warns that the Treasury must stand ready to deliver extra support measures if there is any slippage in the roadmap for England and no doubt will echo that plea to the Scottish Government who have yet to set a date for lifting of restriction. The trade association is calling on the Chancellor to encourage the full lifting of restrictions beyond 21st June to ensure that hospitality can return to full strength, along with an early announcement for support should this not be possible.
The letter also highlights ongoing issues that sector businesses are experiencing when it comes to access to capital. While Government loan schemes have been received positively, UKH says there are real concerns in the sector about their rollout with many operators reporting that banks are denying them access to critical funding. As a potential solution to this challenge, UKH proposes working with the Treasury to develop a more targeted loan scheme that recognises the particular difficulties that the hospitality sector faces.
UKHospitality Chief Executive Kate Nicholls said, “The hospitality sector stands ready to play its part in helping to power the recovery, create jobs and reinvigorate local communities, but that will only be possible if our businesses return to viability at the earliest opportunity.
“Firstly, we need the Government to deliver on its commitment to dropping Covid restrictions and measures on 21st June. But even then, many companies will be facing huge rent debts and other business costs so access to capital through loans is critical to ensure they can get back on their feet again as soon as possible.
“The revitalisation of hospitality will yield a substantial return on investment – in terms of economic growth, employment, levelling up, high street regeneration and Government revenues. Brighter days are ahead but we urge the Chancellor to ensure that his welcome and substantial support for the sector doesn’t go to waste.”
Yesterday the First Minister Nicola Sturgeon declined to open beer gardens until at least 2nd July – citing the possibility of bars and restaurants being ‘hot spots’ for the transmission of the virus. Talking loudly and the potential of people singing can carry the virus further? She certainly hasn’t done much to help bolster confidence in the sector with that statement. It is nearly as bad as Boris saying ‘Don’t go to pubs and restaurants.’
She cities potential scientific evidence. Let us see the evidence. Could, in fact, everywhere be a ‘hot spot’ if ‘test, trace and isolate’ is not ramped up, even the Scottish Parliament – perhaps excessive loudness should be banned in the debating chamber at Holyrood – after all talking loudly or shouting anywhere enclosed is technically a ‘hot spot’. Rant over. But really research shows that confidence regarding going to pubs is already low. I hope in the interests of transparency the First Minister can tell us who the scientists she is taking advice from are.
Of course, no one wants to open and risk our employees and customers health, and we want to give our customers confidence when they come back to pubs that’s why licensees are putting so much effort to making their businesses Covid-19 free. But when I look around at what is happening outwith hospitality – mass demonstrations, queues for shops, no social distancing inside supermarkets – despite all the PR, mass gatherings in parks, swing parks that are not being wiped down… I can’t help but think that it would be more healthy to gather in a controlled environment with the right sanitation and procedures in place. And if music is really the biggest barrier to re-opening I am sure licensees would be happy to turn it off!
The government also released their Re-opening Guidance for tourism and hospitality –despite weeks in the writing is totally “underwhelming”. It has been described to DRAM as “a lot of information but no guidance.’ The Government is using scientific experts perhaps they should also reach out to the operators in the licensed trade that are experts who in fact offered their support to her in a letter on 21st May – and who still have not been contacted. They include the best operators in the country – Buzzworks, Montpeliers, Caledonian Heritable, Lisini, Manorview, DRG – they could have put together a comprehensive guidance plan which actually answered the questions everyone is asking. You can read the Government guidance here. Your comments are welcome: https://www.gov.scot/publications/coronavirus-covid-19-tourism-and-hospitality-sector-guidance/
It’s hardly surprising that UK Hospitality also released some comprehensive guidelines too. They obviously had an inkling of what was coming, which our government has also directed you to. https://www.ukhospitality.org.uk/page/ScotlandGuidance
We want the Government to do their job and get test, trace and isolate’ sorted and let the hospitality industry make their businesses safe. That’s what they do on a daily basis. Hospitality owners want to open when the transmission rate lowers – so please First Minister let us all know at what level of ‘R’ can we open. If there is no infection the islands or North – why not let these pubs open earlier? The business owners that I have spoken to have all taken PPE and this is backed up by the survey results which show more than 70% have already bought PPE. We are doing our best to comply, to engage the government and to keep people in employment. Over to you.