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Hospitality and Night Time Sectors Fear Business Failures After Unlocking Postponed

Written by: Keith Tully

Waitress wearing black apronRepresentatives of the hospitality and night time sectors are fearful that the government’s decision to postpone the lifting of Covid-19 restrictions in England will result in a significant number of business failures.

The trade body UKHospitality has warned that the newly announced four-week delay to restrictions being lifted could cost its sector as much as £3 billion in lost sales and will have a knock-on effect on bookings throughout the summer and into the autumn.

Operators of bars, restaurants and nightclubs have been put under huge financial pressures since the pandemic began with their ability to trade having been restricted since the first half of 2020.

Many businesses across the UK have already been forced to close permanently but there are concerns that some of those still afloat could be further damaged financially by the government’s decision to push back the planned lifting of restrictions for an extra four weeks.

As far as UKHospitality is concerned, the key issue now is ensuring that those businesses with major cashflow problems are supported by the government so they can survive into July and beyond.

“Our businesses face incredible levels of debt and will now face a huge cost hike, with business rates payments set to recommence and rent accruals due at the end of the month,” explained UKHospitality’s chief executive Kate Nicholls.

“Simply put, if the supports provided by the chancellor are not sustained and adjusted, businesses will fail and getting this far will count for nought.”

Meanwhile, the Night Time Industries Association (NTIA) has described the decision to postpone the further unlocking of the economy in England until the second half of July as being a “devastating blow” for its industry, which it says has been “hardest hit by this pandemic”.

“In a very real sense, the prime minister has ‘switched the lights off’ for an entire sector,” said Michael Kill, the NTIA’s chief executive.

“Many businesses have not survived this pandemic and others are on a financial cliff-edge, unable to operate viably.”

Mr Kill has insisted that the decision to delay the full reopening of the nightlife industry beyond June 21st must be accompanied by a major financial support package from the government.

“Distressed industries cannot continue to be held in limbo, with thousands of businesses left to fall,” Mr Kill from NTIA said in a statement.

Keith Tully

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Keith Tully
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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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