‘Existential threat’ of coronavirus to hospitality

Eloise Hanson Eloise Hanson Uploaded 15 March 2020

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UK: Trade association UKHospitality (UKH) has called coronavirus an “existential threat” to the hospitality industry in a letter to Rishi Sunak, the Chancellor of the Exchequer.

The BBC has reported that in the letter, UKH chief executive Kate Nicholls suggested broader support for the hospitality sector, claiming that without help “a significant number of jobs” could disappear by May.

Measures such as permitting “temporary staff redundancies where demand falls substantially - with Universal Credit covering wage costs” were put forward by Nicholls, as well as a suspension of payments to HMRC for three months, and Government Statutory Sick Pay payments made to all hospitality businesses.

The economic impact of the coronavirus pandemic is summarised in Nicholls’ words: "This is business-critical - these are cash businesses… if you don't have people coming through the door, you will run out of cash very quickly. So we are talking about intervention that is needed next week to make sure that in six to eight weeks these businesses continue to trade, and if we don't get that support, by May, we will be facing business failures and a significant number of jobs at risk."

"This is affecting hospitality companies of all sizes and shapes... it's high street businesses that are seeing footfall decline, so your pubs, bars, your cafes… but also it's the larger companies across the sector - they are the firms that employ the most people," she added.

Announced in the 2020 Budget earlier this week, Sunak confirmed that the government would abolish business rates for most British businesses with a property of a rateable value less than £51,000.

This is to be extended to shops, cinemas, restaurants and hotels. 

However, Nicholls said: “We recognise that measures announced today, to further relieve pubs and to bring other hospitality venues into scope for reliefs, are a positive recognition of hospitality and the vital role it plays in the UK’s economy and culture. That said, many of the hardest hit businesses will not benefit, either because they have rateable values above £51k (or above £100k for pubs) or because state aid rules mean that venues in bigger chains - the larger employers - will be ineligible, so more will likely be needed between now and implementation of a new system”. 

Calls for government amendment to its coronavirus strategy has also come from UK scientists, who believe that the current approach will "risk many more lives than necessary".

The UK Government recently reported that as of 9am on 14 March 2020, 1140 people tested positive for coronavirus. 

A Solidarity Response Fund, the first of its kind, has been set up to raise money to support the work of the World Health Organisation (WHO) and partners. Funds will go towards countries, particularly those most vulnerable and at-risk, to prepare for and respond to the COVID-19 crisis. 

The fund has already launched with support from Facebook and Google. 

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