1 in 10 operators will fail if restrictions not removed on 21 June

By Nikkie Thatcher contact

- Last updated on GMT

Trading issues: many operators in the survey reported customers being unaware of restrictions in place was the top challenge (image: Getty/william87)
Trading issues: many operators in the survey reported customers being unaware of restrictions in place was the top challenge (image: Getty/william87)

Related tags: British institute of innkeeping, Steve Alton, Legislation, Finance

Some 11% of licensees predicted their businesses will fail if the Government does not continue with its roadmap as planned and remove all restrictions later this month, research has found.

The Trading, Support and Full Reopening June 2021​ survey from the British Institute of Innkeeping (BII) also stated just a third (34%) of the 350 respondents said they will continue to break even and 43% will carry on trading at a loss and build up further debt.

Three quarters (74%) of those surveyed are currently trading at less than 75% when compared to 2019 figures.

The majority (89%) called for a continuation of the business rates holiday until April 2022, a reform of the business rates system, to extend the decrease in VAT until April next year alongside a specific reduction in duty for draught products.

Almost two thirds (60%) called for Government support on rent debt while 66% wanted further landlord support.

Debt accrued

Top challenges facing licensees at present:

Pubgoers unaware of restrictions (67%)

Unable to recruit staff to keep up workload (53%)

Employees resigning after being on furlough (35%)

No shows (34%)

Insufficient cash to pay for staff and/or stock (30%)

Customers unhappy due to high demand and staffing problems (28%)

Last minute cancellations (18%)

The report found the largest reopening challenge (67%) was customers lacking knowledge of social restrictions in place, followed by more than half (53%) stating they couldn’t hire staff to keep up with demand.

Almost six in 10 (57%) received a Bounceback Loan with 7% having taken a Coronavirus Business Interruption Loan and 8% a bank loan.

Furthermore, nearly three quarters (72%) have taken additional pandemic specific debts, while a quarter (24%) have unpaid rent debt and a fifth (19%) have unpaid creditors.

Those who have used loan schemes or credit, half (50%) have accrued debts of more than £20,00 per pub and half of these have debts of £40,000 to £80,000 per site.

Some 56% of respondents will need more than two years to repay debt accrued and half of these require more than five years.

Uncertain future

BII chief executive Steven Alton said: “While it has been fantastic to see many of our nation’s pubs reopening after months of closures, our members and teams are exhausted as they try to rebuild their businesses, keep staff and customers safe, and adhere to all the extensive restrictions, specifically placed on their venues.

“Without the full lifting of restrictions on Monday 21 June, especially table service and social distancing, which render the majority of our members unprofitable, these viable businesses face at the very least, an uncertain future, filled with years of debt repayments, and at worst, immediate business failure.

“We have take our members voices to the heart of the Government throughout the course of the pandemic, specifically highlighting the significant role they play in the economy, through employment and support of their local communities across the UK.

“Without real certainty of trading once again, free of restrictions, the vital role they are able to play at the heart of our nations’ recovery is in jeopardy.

“We are calling on the Government to now deliver against its roadmap, allowing our pubs to begin their long road to recovery, before it’s too late.”

Related topics: Legislation

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