Two-thirds of hospitality businesses to not survive prolonged lockdown: study
A majority believe a significant break or ‘holiday’ from rent obligations is required.
Two thirds of hospitality companies believe they will not survive a prolonged lockdown without further far-reaching support from the government, with the vast majority believe a significant break or ‘holiday’ from rent obligations is required.
A new study by KAM Media, which involved 211 hospitality companies, showed that 66% of businesses do not think they can survive a further three months of lockdown measures.
“We need some fundamental interventions on rents and property, and on finance and loans, and it’s becoming clear that much of hospitality will require a much longer extension of the furlough scheme, given that businesses will not emerge fully from lockdown for some time,” Katy Moses, managing director at KAM Media, said.
“As an industry, we need to get behind campaigns such as #NationalTimeOut, spearheaded by Jonathan Downey and Hospitality Union, who are campaigning for a nine-month rent holiday, to be supported by the government.”
Referring to the #NationalTimeOut campaign, the research also showed that 87% of hospitality businesses do not expect to survive without the nine-month rent holiday or some equivalent being introduced.
“The government has moved quickly to address some of the existential challenges that hospitality faces, brought by the crisis and lockdown, and as an industry we are extremely grateful,” UKHospitality CEO Kate Nicholls said.
“However, this research underscores the scale of the challenges, which is reflected in the current mood of the industry. We need far-reaching and continued support, and unprecedented intervention of the order of the proposed nine-month #NationalTimeOut idea or an equivalent concept of similar scale, in order for hospitality jobs and businesses to endure this crisis and to be there to drive the recovery.”
The research also said that the hospitality industry is also expecting a long recovery time before sales return to pre-COVID-19 levels. When lockdown measures are lifted, most companies (86%) said they thought consumers would eat out less, with 82% expecting consumers to drink out less, as well.
It also found that 83% of those questioned expect customer numbers to be down for at least six months after re-opening, with 38% saying they would expect it to take at least a year for their footfall to return to pre-lockdown levels.
Of the 211 participating companies, one in every four had started offering delivery as a result of the lockdown, and 80% say they intended to continue offering this service post-lockdown. 67%, meanwhile, are already “proactively planning” how to attract customers back once they are allowed to reopen.
In separate statements, UKHospitality also said that an extended period of social distancing could cost one million jobs unless measures to "protect hospitality businesses are put in place" whilst welcoming new measures by the UK government to prevent "aggressive" rent collection in the wider commercial sector.
Financial impact nothwithstanding, some retailers also warned the government not to push too soon to reopen the economy for fear of causing greater long-term damage, the Evening Standard reports.
“We certainly do not want any false dawns as re-opening and then having to close again would be a disaster for most, if not all, of our sector," YO! Sushi’s chief executive Richard Hodgson said.
