The long road to the hospitality industry’s recovery starts now

Each day brings us closer to the end of this lockdown, but it is an end that will come much sooner for some than others.

The long road to the hospitality industry’s recovery starts now

Each day brings us closer to the end of this lockdown, but it is an end that will come much sooner for some than others. In Germany, Denmark, Austria, Slovakia, Serbia and more, some small businesses have already been allowed to re-open, with Italian Prime Minister Giuseppe Conte saying he hopes to start Europe’s worst-affected country’s exit strategy on 4th May.

For the UK, there is no imminent sense that lockdown will be lifted, but looking at the continent gives us hope that while normality is a way off, it is a matter of time before some business resumes.

The hospitality sector however, which makes up the lion’s share of the UK’s 5.9 million small businesses, will have to wait. Restaurants, bars and pubs will in all likelihood, be the very last to open their doors when the time comes. An outcome that will surely cause much stress to the sector that works to keep the spirit of community alive during the crisis. 

This is a double blow for an industry that has already been the hardest hit by the lockdown itself. Not only unable to operate as normal, unlike many retailers where the majority of revenue may well have come online already, only a limited number of hospitality outlets can move their operations online – and most of those who do will find their turnover severely depleted.

It has been argued that one possible saving grace for the sector will be the public’s natural urge to flock to restaurants and pubs once restrictions are eventually lifted for good. But while this may be a short-term high, with thousands likely to have been affected financially by the crisis, eating out and taking holidays will be the easiest luxuries to cut back on.

This will apply globally, and so not only will Brits be wary to take off abroad, inbound tourism is likely to dip as well. Hospitality businesses that rely on an influx of seasonal visitors will particularly struggle in this environment.

This is no-one’s fault – it is an inevitable consequence of social distancing measures But it means that as we move forward, government, big business and society has to come together and commit to not only saving the hospitality industry from complete collapse in the short-term, but ensuring it is sustainable for the long-term – particularly if some level of social disruption is maintained for months or even years to come, as suggested by Chris Witty last week.

The Government’s current measures set out that no interest will be paid for a year by small businesses on their loans, but this assumes that the crisis will have been averted by then, meaning one year from now, small businesses that have relied on interest-free loans to survive may be burdened with debt they cannot pay off.

In order to protect the industry, interest holidays have to be extended until the point the crisis is over – or at least the point individual businesses can re-open as normal – as should mortgages, rent and business rates. For example, at Placed, the recruitment app for the hospitality industry, a number of users are supporting the Hospitality Union’s recent campaign to challenge the government to give restaurants 9 months free rent. Such measures from the government will help support the 70,000 pubs, bars and restaurants that are closed but still being forced to pay rent they can no longer afford. These measures will help to support the services industry on their road to recovery. 

Further to this, suitable notice has to be given to business owners, so that they can prepare appropriately for both when to open and how to do so safely and sustainably. Small vendors will struggle to operate at smaller capacity if they are to open with social distancing measures in place and so they need time to figure out how they can do so, and support from the government has to reflect this whether it is in making up for lost income, or extending furlough measures to protect jobs.

The long-term effects of this crisis will be both many and unknown, but government and society must respond in a way that is both thoroughly thought through, and appropriate to the situation of the moment.

But there are solutions coming about from within the sector itself. One benefit of the pause in activity is that it has given business owners a chance to stop and reflect about the way they operate in future.

This will lead to the creation of a whole line of new jobs that businesses didn’t appreciate beforehand. It may just be a fraction of their usual takings, but for those who are taking a tech-led approach that is continuing their operations on some level, they are gaining new skills that will help them in the future. An increased digital presence after the pandemic will also mean the opportunity for more jobs to be on offer in a sector that has struggled for so long.

The spirit of community is hugely important at this current time and what we will see is that the business owners who are innovating in the interim will be the ones to lead the sector’s fightback down the line.

It is a long road ahead, but one that starts now and will take the contribution of everyone in society to keep the hospitality sector afloat.

Jennifer Johannson
Jennifer Johannson

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