Hospitality leaders warn of ‘devastating’ impacts of four-week delay to end of lockdown

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Pubs - Matt Dunham /AP
Pubs - Matt Dunham /AP

Hospitality leaders have hit out at the "devastating" decision to delay lifting all final lockdown restrictions until July 19, amid warnings that the industry faces a £3 billion hit during one of its busiest trading periods.

Boris Johnson announced on Monday evening that the planned full reopening of pubs and restaurants will be delayed by four weeks, amid mounting concern over the Indian variant.

With infection rates soaring and hospital admissions ticking upwards, the Prime Minister confirmed that the rule of six, table service and social distancing would continue to be required by venues.

The delay is now expected to cost the pub industry up to £100 million a week, with 2,300 venues still closed due to the current restrictions making reopening unviable.

Across the entire hospitality sector, as many as one in four businesses are yet to reopen, with those that are trading said to be generating just two thirds of the revenue they would normally make during the busy summer period.

Industry leaders said that the delay will blow a £3 billion hole in the revenues that venues would otherwise be making if all restrictions had been lifted as planned.

Others also warned of the potential impact on public compliance, amid reports that some venues are experiencing greater push back from customers when trying to enforce mask wearing and the requirement to check in to the NHS test and trace app.

Speaking to The Telegraph, Kate Nicholls, the chief executive of UK Hospitality, said: "It is really devastating news. This is going to be incredibly challenging for businesses to manage.

"The industry is operating below profitability. Every day that they are open with these restrictions increases their losses and drives them closer towards being unviable.

"The lack of additional support to go alongside these continuing restrictions will undoubtedly have an impact on their financial viability and jobs.

"We’ve got one in four hospitality businesses that haven’t opened yet. The 21 June was their restart date, so they are at the greatest risk.

"The remaining 75 per cent are operating at best at two thirds of normal revenue level. To have to survive four more weeks will mean they lose £3bn in revenue that they would otherwise have earned."

Ms Nicholls said that the delay would be compounded by the Treasury’s decision to extend the generosity of the Government’s Covid support schemes.

The furlough scheme is due to begin tapering off from July 2021, with businesses asked to contribute 10 per cent towards their employees wages.

Business rates bills are also due to resume next month, while the rent protections will also fall away.

"It’s a double whammy of extra restrictions and sub-economic trading, and a significant increase in costs at exactly the same time," she continued.

On Monday evening Labour MP Jeff Smith described the delay as a “hammer blow” for hospitality, adding that many were currently operating at a loss and at risk of collapse.

Responding, Matt Hancock, the Health Secretary, told MPs he “of course” understood the impact on businesses, but insisted the Government’s financial support was one of the most “comprehensive in the world” and would continue until September.

However, Emma McClarkin, the head of the British Beer and Pub Association, said: "This is beyond disappointing for the beer and pub sector. It is going to cost us massively, not only in terms of the confidence hit on the sector but also in terms of the economics.

"That four-week delay will cost £400m for the pub sector. There are still 2,300 pubs which remain closed and will remain closed for longer.

"A four week delay in the peak pivotal period, during the summer, is going to be hitting us at the most crucial point of our recovery.

"We need to have an immediate extension of business rates relief, we need an immediate extension of VAT [relief], because if we’re not open we can’t benefit from it.

"This has to be the last delay, we cannot sustain anymore as a sector."

Meanwhile, others in the industry said they were seeing greater "questioning" from the public over the continued imposition of restrictions, with some venues reporting increasing levels of resistance towards staff attempting to enforce the rules.

One added that they feared that the failure to reopen hospitality fully would simply drive people to hold gatherings at home, while also pointing to the issues with illegal raves last summer.

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