Visit Lincoln is pleased to share a detailed report produced by the All Party Parliamentary Group (APPG) on Hospitality and Tourism which was launched this week. Read the executive summary and download the full report.
This was produced with UK Hospitality which provides the secretariat for this group as well as representing the sector.
It sets out a clear overview of the challenges in the visitor economy and food service sector and makes recommendations on the areas government needs to tackle to aid recovery of this sector.
Across the country, few businesses have been as badly impacted by the COVID-19 pandemic than those in the hospitality and tourism sectors.
In the UK, from March 20th until the time of writing (16th June), the vast majority of businesses within these sectors have been forced to close. While a few have managed to continue trading in some capacity, for most, it is simply a case of waiting and wondering when they will be able open once again. At the time of writing we are now seeing ‘non-essential’ retail businesses re-open. However accommodation providers, bars, restaurants and most tourist attractions remain closed.
Whilst the measures that the Government took were, and remain, essential to stem the spread of COVID-19, save lives and preserve business viability, the impact on this section of our economy has been huge.
As discussions move towards recovery and reopening, we must recognise the importance of getting the support measures right for our sector. While it may not always be recognised, hospitality and tourism are two of the country’s biggest employers. In normal times, thriving in communities in every region in the UK and providing millions of jobs. We must get these businesses back on their feet as soon as it is safe to do so.
For this reason, the APPG launched the urgent ‘Pathways to Recovery’ inquiry, focusing on how businesses can recover post-COVID-19.
The aim of this report is simple; to provide Government with a blueprint for how to support the hospitality and tourism sectors through their transition to a ‘new normal’ and enable them to thrive moving forward. This report will be fed into Government
In this report Kate Nicholls CEO of UK Hospitality talks about how COVID-19 has presented an extraordinary challenge to businesses across the hospitality and tourism sectors.
“The Government’s response has been unprecedented, announcing a series of measures that have undoubtedly saved many companies and millions of jobs. This was a clear recognition of the vital role that tourism and hospitality play in the UK’s economy and will continue to play when the COVID-19 lockdown is lifted.
However it is imperative that the Government continues to assist our businesses as they move towards recovery, which will be by necessity a ‘drawn-out’ one. If both the hospitality and tourism sectors are to return to anywhere near their former strength, they will require a range of support mechanisms, particularly given these businesses will be among the last to reopen and will face on-going restrictions such as the two metre rule.”
APPG REPORT EXECUTIVE SUMMARY
- The hospitality and tourism sectors were extremely vulnerable to the impacts of COVID-19 virus and have been hit particularly hard. A survey submitted to the APPG suggested that only 11% of businesses within these sectors are currently able to operate at normal levels, with 89% currently operating at a significantly reduced level or being closed. Businesses are expecting a very slow recovery in the second half of 2020. According to one study, by December the best-case scenario has a one-third decline in trade (31%).
- Tourism is unlikely to rebound quickly, with international estimates suggesting that tourist arrivals for the year will be down by over 30%. Estimates on recovery time vary, however the most widely accepted projections suggest that will not return to pre -COVID levels until 2022. When planning support measures, it is imperative that the Government consider that businesses within the tourism sector will likely miss the majority of their peak season in 2020 and as a result will be going from low season to low season.
- The Government has rolled out an unprecedented level of support for businesses. This has been widely praised and welcomed across the hospitality and tourism sectors. However, it is a necessity that this support continues until businesses are once again able to trade at a sustainable level. Without this support many businesses will be unable to survive.
- The Coronavirus Job Retention Scheme (CJRS) and its continuation is paramount to business survival. Over 75% of eligible respondents to the APPG had suggested that an extension of this Scheme beyond June should be a key Government priority. While businesses have welcomed the Government’s decision in fact to extend the scheme until October 2020, the details will be key. Many businesses will be unable to pay a portion of staff costs from August. It is imperative that existing levels of support continue for these businesses until they are able to reopen at a level that would enable them to break even.
- Sector businesses have made clear that they require more assistance on rent issues. While the Government moratorium on evictions for 3 months was welcomed, landlords still have recourse to seek evictions at this time. A suggested alternative has been to extend the legal right to deferment and protection from lease forfeiture for and to include all forms of debt enforcement, mandating breathing space to allow parties to renegotiate rent terms.
- When looking at reopening, it is essential that businesses in the hospitality and tourism sectors are looked at flexibly. There is not one type of businesses within these sectors, and some may be able to reopen quicker than others by adhering to the likely social distancing measures that will be imposed. The economy and the hospitality sector will be best served by a social distancing standard-led approach, not by a prescriptive business ‘type’. It is worth recognising that around 25% of the hotel estate and 10% of the takeaway/food to go estate (as well as contract catering/workplace canteens) has continued to operate to some degree throughout this strict lock down period.
- A common framework is required across all sectors in order to prove that businesses are safe for consumers and staff. This must include robust plans to protect those who will be inside a business premises, as well as detailed plans for how to clean venues. If this is present, there is no reason why a business in any sector should be prohibited from opening, so long as they are able to prove compliance to a universal standard.
- The current 2-metre social distancing guidance that is recommended by the government will make the operational reopening of many venues challenging. Business confidence studies submitted to the APPG suggested that up to 75% of businesses surveyed were not confident that they could survive with this level of social distancing enforced. This level of restriction exceeds the WHO guidance (1 metre) and that used in other countries such as Germany (1.5 metre). The Government are reviewing this currently and should work with industry on this issue.
- It is imperative that the Government is proactive in re-establishing the tourism sector in the immediate aftermath of COVID-19. Suggested ways for this to be done including revising business taxation, creating air pods with other countries, promoting UK domestic tourism through visible and well-funded campaigns and making tourism visas easier and cheaper to acquire.
- Communication between Government and businesses is essential and could in many cases dictate business survival. In terms of reopening, it is imperative that businesses are given sufficient lead time to ready their supply chains and get themselves in a position to safely reopen.
- Businesses still require more information from the Government regarding the necessary steps required to keep staff and customers safe. It is imperative that this is communicated in good time and that the PPE requirements are explicitly laid out.
- Depending on the extent of the restrictions retained or introduced, some businesses may also need to change their layout to better enable social distancing. Staff will also need more training in order to be able to manage social distancing and to meet higher hygiene standards.
- Sector businesses are already facing significant cost pressures in normal times, which will severely inhibit their recovery. There is widespread business support for a review of current business taxation, including VAT and business rates.
- The tourism sector will need Government support if it is to rebound quickly. Ideas emanating from within the industry include the creation of ‘air bridges’, reduced Air Passenger Duty and marketing support.
For help and advice on any of the above please contact Visit Lincoln directly