News

Business rates / Pubs / 19 April 2021

Hospitality reopens but full recovery will need support

Hospitality trade bodies UKH, BBPA and BII have welcomed the reopening of pubs and restaurants who have outside areas, but have warned that there is still a long way to go for businesses to recover from the devastating impacts of the pandemic. They are calling for Government to extend the business rates holiday for at least a further three months to allow businesses to get back on their feet.

Whilst the public have embraced the relaxation of lock down rules, allowing them to reconnect safely in pub gardens across the UK, the trade bodies have warned that the majority of businesses are still in very real danger of failing.

Results from a recent survey of members by CGA from all 3 key trade bodies showed that only 40% of pubs have been able to welcome customers back to their outside spaces, with turnover only expected to be 29% of that achieved over the same period in 2019. This is despite the hundreds of millions of pounds invested in outdoor areas and safety measures, at an average of over £8,000 per site.

Even when Step 3 of the roadmap allows indoor drinking and dining for 6 people or 2 households, they are estimated to only reach 56% of turnover when compared to pre-pandemic figures.

Almost a quarter of those surveyed believe that their business will be unviable before the end of the year based on current trading estimates.

The trade bodies are calling for business rates to be cancelled completely in England for hospitality until October 2021, to allow businesses time to recover before yet another cost comes back online. This is an additional three months, with rates currently set to restart in July. In Scotland and Wales hospitality has a full year of business rates holiday.

A joint spokesperson for the trade bodies said:

“It is clear from the demand for bookings in our unique and vibrant hospitality venues, that the public have desperately missed the opportunity to come together over a meal or a drink with friends and family.

“Despite this, our sector will have a long and rocky road to recovery, especially while any restrictions remain in place in our venues. After a year of closures and strangling restrictions, they are entering the summer, crippled with debt, having to employ more staff to manage the huge number of complexities surrounding Test & Trace data collection, enhanced cleaning regimes, table service and many more requirements placed on their businesses.

“The circumstances in which our members find themselves are all the more concerning when you factor in that they expect to turn over just 29% of what they normally would do when opening outdoors only. Even when pubs hopefully reopen indoors in May, they expect to only reach 56% of turnover when compared to normal times.

“It is clear based on this that reopening pubs fully, indoors and outdoors, without restrictions, is going to be key to their survival. It is therefore imperative the Government sticks to its roadmap.

“It’s important to note that even when restrictions are fully lifted in June, our members  will still only be achieving 80% of the turnover seen in 2019, a figure which at any other time would have been untenable, so more support is going to be needed in the long term.

“Whilst Government support over the pandemic has been welcomed, the vast majority of our members have not yet been paid their Restart Grants, funding for which was delivered to Local Authorities over 2 weeks ago. Their businesses are teetering on the edge of survival and they will now be facing their business rates becoming due on 1st July, with potentially only 1 full week of restriction free trading under their belts.

“For many, this will be the last straw, jeopardising the jobs that have been protected by the furlough scheme until this point. We need to see a full cancellation of business rates until at least October 2021 to allow them the breathing space to recover their businesses.”

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