Hospitality sector ‘facing cash crunch’ without further support
One in five businesses in the UK hospitality sector could run out of cash in the next week unless more emergency support is confirmed, the industry has warned.
In a letter to the government, more than 200 hospitality firms warned they faced a “truly perilous” situation with months of continued restrictions ahead.
Prime Minister Boris Johnson this week said pubs and restaurants can reopen outdoor areas from 12 April, while indoor service will not be allowed until 17 May at the earliest.
The letter, seen by the Financial Times, was signed by companies including Carlsberg, Intercontinental Hotels, pub chain Wetherspoons and Legoland owner Merlin Entertainment.
“There is a significant gap between the current support provided by the government and the fixed outgoings associated with a closed hospitality business,” the letter read.
“These will vary by size and location, but an average size pub or restaurant could be having to pay out £10,000 per month.”
The sector reacted with fury at the prime minister’s so-called roadmap for exiting lockdown, as businesses had hoped to reopen in time for the Easter and May bank holiday weekends.
Kate Nicholls, chief executive of UK Hospitality, warned that restrictions on service would force many businesses to trade below “sustainable levels”.
Government analysis has already forecast that two-thirds of businesses in the sector will run out of cash before May.
“The restrictions in place mean that there will be no sustainable reopening until 21st June, with May 17th the first opportunity for any reasonable trading,” the letter read.
The companies called for an extension to the furlough scheme and business rates relief, grants for hospitality businesses until June, a cut to beer duty and a moratorium on Covid loan repayments until at least July.