UKH boss: 'Trade support cannot stop now'

Nicholls told delegates of the one-off special digital MA500 this week (Thursday 16 July) challenges ahead included weak consumer confidence and rent debt.

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She said: “[There’s] still much more to do. It is still a very fragile situation, the businesses in the sector still need a lot of support.

“We will need more support going forward because we have got a long slow road out of recovery. When we did a survey of our members recently, only a quarter of them anticipated getting the breakeven by the end of this year and half by the end of next year so significant additional challenges to come.

“More support will be needed by the Chancellor to stave off the domino effect of company voluntary arrangements (CVAs) that we have seen on the high street and that we have seen going through the sector in recent weeks with the redundancies that are coming through.

“The challenge of surviving to January, to get the benefit of the employment packages, the additions to furlough the Chancellor announced, the jobs subsidy and support for older apprentices.

“The challenge now is can we get through the next six months to be able to benefit from those additional financial challenges that will come through and will be providing a lifeline to businesses in January.”

Mixed bag

Nicholls outlined how the minority of businesses reopened on 4 July and the challenges of a decreased footfall can have.

She added: “Consumer confidence remains weak. Although we did manage to open on 4 July, only 36% of businesses reopened that weekend, that added to the 8% of businesses that were already open and trading in some form or another.

“Less than half the sector reopened then. Moving towards an estimate of 60% of the sector being open by the end of July but those businesses that are reopening are reporting suppressed and reduced capacity and revenues.

“The average across the sector as a whole is about 45%. It ranges from a low of 20% in many town and city centre venues, through to 70% for the accommodation and food-led venues.

“Very mixed bag with still quite a lot of problems. Even those operating at 70% are just at breakeven and that is at weekend peak trading. It is not sustainable in the longer term without additional support.”

Nicholls highlighted the key area the sector needed further help with was rent, alongside support for areas of the industry that are not yet able to reopen.

No date

She said: “The key area is about rent. We have a large amount of rent debt in the sector that is building up, which will act as an anchor on growth and recovery unless we can get that addressed.

“More support for wet-led and entertainment-led businesses, they are particularly dependent upon the entertainment restrictions and live music restrictions being lifted.

“We still have no date for reopening big parts of the sector like bowling alleys, nightclubs, music venues, those businesses are going to need additional support.

“We are talking about extension of the rateable value grant, raising the threshold for those businesses that are closed and full furlough for the businesses that have no opening date yet. Still a lot more to be worked upon.”

Looking ahead, the UKH boss said the Government needed to concentrate on encouraging workers to go back to the office in order for operators to take advantage of this trade.

“[UKH] is working with the Government to ensure we have really strong, clear messages about the lower level of risk that is now faced by most of the population and ensuring we have got a clear communication from Government about returning on public transport for leisure use, critically over the summer period and working on a back to work campaign,” she said.

“We have seen large swathes of city centres that are like a ghost town, particularly mid-week where you are not getting office workers returning to work and it's going to hamper the hospitality-led recovery, particularly in those venues if we don't get a return to work message coming through strongly from Government.

“They have started the process of talking about this with the Enjoy Summer Safely​ campaign, which is trying to get consumers back out, confident to go out to the high street, to spend, to eat out, that was what was driving the thought processes of the Summer Statement.

“We have had a slight change of policy where the Government is saying if you can work in an office, you should return to work but it's going to need a much more concerted campaign and in particular it's going to need a specific campaign and support for London.”