As with the first surge in the coronavirus, it looks as though the hospitality sector maybe the industry with the most to lose this festive season. As fears over the Omicron variant rise, party-goers and those attending meals have flocked to cancel their Christmas party bookings. This has prompted the hospitality industry to plead for further support from the UK Government. In response, Rishi Sunak has scheduled crisis talks with business leaders. The question is – does the hospitality sector need more support?
Why Is There Such Concern For The Hospitality Industry?
Unless you have been living under a rock, you will no doubt have been following the mass fear that has come as a result of the proliferation of the Omicron variant. As people are worried about having to isolate over Christmas and New Year, the public are in the process of cancelling non-essential plans in the hopes of protecting their time with their families.
This is a massive blow for the hospitality sector, as naturally a lot of the plans that are being cancelled are those that would take place in establishments that fall under the umbrella of hospitality. The British Beer and Pub Association are estimating that pubs will sell 37 million less pints over Christmas than was originally expected. This would result in losses of up to £297 million.
Coronavirus Support That Is Currently Available To The Hospitality Sector
Whilst the Chancellor has expressed great concern and sympathy for the hospitality sector at this time, his initial stance has been to point to existing support, rather than immediately offering more. In fairness to him, there is already substantial support being given to the hospitality sector.
Currently, the hospitality sector are enjoying a VAT reduction of 12.5%, down from their usual 20%, which is currently scheduled to last until the Spring. In addition, the UK government have given local authorities £250 million in grants to be used to support local businesses. He has said that is primary concern is getting this money to struggling businesses as quickly as possible.
What Further Support Are The Hospitality Industry Asking For?
Despite the current support, industry leader in hospitality are still deeply concerned about the impact the virus may have on sales in December. They argue that they suffered greatly last year, considering that the festive season can represent over a quarter of all yearly takings for some establishments, and that they will not survive another barren Christmas period.
Thus, there are calls from those within the industry to keep the VAT rate of 12.5% for longer than just Spring, and some are even suggesting that VAT rates should be reduced further. Other suggestions have been the suspension of business rates for hospitality businesses for the first quarter of 2022, and the reinstatement of recovery grant.
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.
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