New research by UKHospitality, The British Beer and Pub Association and The British Institute of Innkeeping shows the scale of the challenges facing hospitality businesses as they look to rebuild from the devastating effects of the pandemic. August 9th is still the date on the table for restrictions being lifted in Scotland, and chief among the trade bodies’ concerns are around staffing, the supply chain and tapering of Government support.
The ‘pingdemic’, as a result of the NHS Covid app, also means up to as many as a fifth of staff in the sector are isolating at any one time. This is forcing operators to reduce operating hours or to close venues completely, threatening to derail recovery.
In February, the business rates holiday in Scotland was extended for a further 12 months for the retail, hospitality, leisure and aviation sectors until March 31, 2022. In terms of priorities for Government support, respondents ranked additional business rates relief into 2022/23 as the top measure, followed by a continued reduction in hospitality VAT beyond March 2022 and, thirdly, an overhaul of the business rates system.
Other support measures needed that ranked highly were a reduction in the tax on beer and alcoholic drinks, as well as help to address labour shortages experienced by the sector.
In a joint statement, the three trade bodies said, “For hospitality to begin a sustainable recovery, Government must continue working closely with us in order to put in place the right trading environment, including measures such as further business rates relief into next year and the extension of the lower rate of VAT. This will offer firms the chance to bounce back strongly and help to rebuild fragile consumer confidence. With the right support, hospitality can be at the forefront of the nation’s economic recovery, creating jobs and reviving our high streets and city centres.”
The survey of over 350 businesses operating tens of thousands of venues found that:
- 100% of businesses surveyed currently have vacancies; mainly front-of-house (84%), non-head chefs (67%) and kitchen porters (36%). A third are experiencing managerial role vacancies. Vacancy levels are running at 10% across the sector – implying a shortage of over 200,000 workers.
- Almost all (94%) of hospitality businesses are experiencing difficulties with their supply chain – 66% have reduced product lines; 63% are seeing delays in deliveries; 60% are experiencing products not turning up; and 56% are seeing major price inflation.
- A return to a VAT rate of 20% next year will have negative impacts on the vast majority of businesses: 43% said they would cut investment; 30% would become loss-making; 28% would cut jobs; 22% would implement a recruitment freeze, and 21% would face business failure