Wishing you were here
The warning from hospitality trade body chief executive Kate Nicholls could not have been starker. She told MPs the industry faces a “bloodbath” unless government support is extended.
While she was giving that grim message and calling for more to be done to protect firms from mounting rental debts, concern was also growing over the tourism industry’s ability to bounce back from the impact of the coronavirus crisis.
The two sectors have been among the hardest hit by the pandemic and the response to it. Doors have been bolted shut, businesses put on hold and jobs furloughed, with little indication when they may be able to get back to normal.
Cabinet minister Michael Gove’s pronouncement that areas of hospitality will be among the last to exit lockdown have added to the growing concern.
Almost 69 million visitors a year flock to Lancashire for its food and drink, its events and attractions, the coast and the countryside.
The visitor economy is worth £3.7bn a year to the county. That makes its recovery from the effects of Covid-19 vitally important for Lancashire’s wellbeing.
Marketing Lancashire chief executive Rachel McQueen said: “Cash flow is very hard for businesses at the moment.”
And when it comes to the possibility of extra government financial support, she says: “It is not just about riding out the immediate situation but actually being able to have funds to come out of the other side fighting.
If we are forced to remain closed until Christmas, then I think you could put a third of the sector at risk.
“We’re at the start of the season where a lot of businesses begin to fill their bank accounts and that is not happening.
“There needs to be recognition that some businesses might need support to get through the winter. Those conversations are very much ongoing.”
There has been aid. Businesses in the hospitality and leisure sectors have been able apply for government funding administered by councils through the coronavirus Covid-19 Small Business Grant and Retail Hospitality and Leisure Grant Funds.
And like other businesses they have been able to use the Coronavirus Job Retention Scheme. It allows employers to claim 80 per cent of the wages of staff that they have furloughed - up to a maximum of £2,500 per employee wage costs. VAT payments have also been deferred.
Speaking after the government’s support package was announced, Steve Fogg, who chairs Lancashire Enterprise Partnership (LEP), said: “The interventions announced have acknowledged the pressures being felt by those in the hospitality and retail sectors by granting 12 month business rate relief and cash grants of scale to help with fixed costs, but I have no doubt more help will be needed.”
We have a very strong and loyal domestic visitor audience. People will come back time and time again to this county.
In March the government also ordered a moratorium on commercial landlord sanctions for at least three months, meaning tenants who miss rent payments because of coronavirus could keep their leases.
That has helped bar and restaurant businesses, but UK Hospitality’s chief executive Kate Nicholls told MPs it was vital that moratorium was extended to give a breathing space of “six to nine months”.
She said: “If we don't get a resolution at a global level, if you rely on landlords and lessees to sort it out individually themselves, it would be a bloodbath come June when we have the next quarter rent that becomes due.
“If we don’t get that intervention on rent, if we are forced to remain closed until Christmas, then I think you could put a third of the sector at risk.”
UK Hospitality has also written to Michael Gove recommending a six-point plan to help businesses reopen following the crisis and save jobs and businesses.
It stresses the need for a phased approach to avoid a “yo-yo effect” of openings and closings which could see businesses fail and see up to a million jobs lost across the UK.
The organisation is also calling for the extension of the furlough scheme beyond the end of June for hospitality, legislative intervention on rent payments, improved access to capital and “a comprehensive fiscal package” to stimulate demand post-crisis.
Kate Nicholls said: “With social distancing measures still in place, reopening the hospitality sector without a plan would be catastrophic.
“An extended period of social distancing will mean that many hospitality businesses will not be able to operate fully, and many will not be able to open at all. Hospitality is a sector built around socialising, so there must be government support for businesses that continue to be hit by this crisis.”
Meanwhile, the All-Party Parliamentary Group for Hospitality and Tourism has launched an urgent inquiry to establish the best ways to support the recovery of businesses in that sector hit by coronavirus.
It will assess what is needed to get businesses in these sectors back on their feet at the right time for the country. And it aims to publish its findings in the middle of May.
Among the issues it will be looking at is the business support needed to help the sector transition to what will be ‘the new normal’.
Steve Double MP, who chairs the group, said: “Collectively, tourism and hospitality add around £80bn to the UK’s economy and in normal times employ 3.3m people.
“These sectors were two of the first to feel the impact of first social distancing and then the lockdown and businesses have been hit hard in every region.
“It is vital that, as the danger of Covid-19 passes, these businesses are able to hit the ground running and return to full strength as rapidly as possible. Ensuring these sectors get back on their feet quickly should be one of the government’s top priorities.”
Some government cash has been forthcoming specifically for tourism, but it is not a lot. A £1.3m scheme announced by the tourism minister Nigel Huddleston will provide financial support to Destination Management Organisations (DMOs) like Marketing Lancashire to help them during the crisis.
The minister said the government’s aim was to work with DMOs on recovery planning, “to ensure that tourism rebounds and once again becomes one of the most successful and vibrant sectors of the economy.”
Rachel McQueen says businesses in Lancashire are making plans for how they will rebuild, though the immediate focus, “has been on how we all collectively ride out the storm”.
Marketing Lancashire has been working to keep the county in people’s minds with online initiatives and Rachel says she has been impressed with the way hospitality businesses in the county have worked to keep their profiles high with initiatives such as home delivery.
She said: “It is great to see people being creative, giving people a reason to keep engaging. It is about trying to keep things positive.”
Rachel also believes Lancashire is well placed to be one of the first tourism areas in the country to mount a recovery, once the crisis is over.
She says: “We have a very strong and loyal domestic visitor audience. People come back time and time again to this county.
“We are very hopeful that this market will bounce back and do so more quickly than others, such as international visitors.
“Once we get out the other side there will be some pent-up energy and a need to get out and about and do things.
“World travel opportunities are likely to be affected in the medium term at least. Our task is to get that home audience to value and utilise our incredible visitor attractions.
“I really do think we should be well positioned to reach out as soon as people can get out and do things. We’re ready to work to drive that footfall back into the county.”
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