Pub boss says hospitality firms need clarity on Covid

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London’s party capital was last night deserted as pub bosses today urged Boris Johnson to provide clarity on Covid-19 curbs ahead of a ‘critical week’. 

Pubs, restaurants and bars have been devastated by the plunge in custom during the normally busy Christmas period over the past couple of weeks as Britons stay at home amid the surging Omicron Covid-19 variant. 

London‘s party capital Soho was last night deserted as pubs and restaurants closed by 10pm because of low footfall just three nights before Christmas.  

The Prime Minister has decided against bringing in a Christmas lockdown this week after scientists concluded Omicron is likely to be milder than the Delta strain, with ministers saying cases are also lower than feared.

Dermot King, chief executive of the Oakman group which owns pubs and restaurants around the Home Counties, told BBC Radio 4’s Today Programme he had ‘no other option’ but to keep his businesses open this week because up to 30 percent of annual profit is made in December.

Mr Johnson warned this week that the Government is tracking the spread of Omicron hour by hour and could act after December 25 amid concerns over a fortnight ‘circuit breaker’ that could be introduced next week.

Pubs, restaurants and bars suffered a 40 per cent slump in sales last weekend according to UKHospitality, while the owner of the Greene King chain said some sites were down 80 per cent on pre-pandemic levels.

And bosses are now desperate to bring in some much-needed trade on New Year’s Eve, saying today that punters will be ‘desperate’ to go out for a drink that night after such a ‘challenging’ year due to the pandemic.

Mr King said the Government’s package to support businesses was ‘wholly inadequate and wholly insufficient’. He added: ‘It’s a pretty critical week for us and I think we’re still ploughing ahead perhaps optimistically but we’ve no other option.’ 

Emma McClarkin, chief executive of the British Beer and Pub Association, told MailOnline: ‘Our overwhelming hope is that we can remain open and trading over Christmas and into the New Year. It is a crucial time for pubs and brewers and after such a challenging year people will be desperate to ring in 2022 with a pint at their local.’

And Peter Marks, chief executive of Rekom, the UK’s largest operator of late bars and clubs, told BBC Radio 4 that New Year’s Eve alone is worth up to 10 per cent of its profits during an ‘absolutely critical’ time of year.

He said: ‘We’re running at 40 per cent down at a period of time which is absolutely critical for us as a business and cash flow, staring at next weekend – wondering, well, we’re probably OK to Christmas now, albeit limping along, but may not even be open on New Year’s Eve which is worth about 8 to 10 per cent of our annual profit.’

In addition, UKHospitality chief executive Kate Nicholls told MailOnline: ‘The Government should prioritise keeping the hospitality sector open and trading. We’ve invested millions in making our venues a safe and welcoming environment for staff and customers. The cost of the sector having to shut down then reopen is staggering and will delay our recovery even further – inevitably costing thousands of jobs. 

‘Devastated hospitality businesses’ hopes of recouping losses during what is traditionally their busiest trading period have been shattered, but staying open between Christmas and New Year would go some way to helping them recover lost revenue. Any further restrictions must see an increase in support – on top of the welcome £1billion grants package announced yesterday.’ 

Retail is also being badly hit, with the New West End Company saying the number of shoppers in the London district was yesterday down 27 per cent on pre-pandemic levels, but up 10 per cent on the previous week. 

It comes as Rishi Sunak‘s £1billion bailout for Britain’s hospitality industry to help firms hit by a collapse in Christmas bookings was today branded a ‘dud cracker’ and not even a ‘sticking plaster’ by hotel bosses.

The Chancellor has come forward with additional help for the hospitality and leisure sectors in England following days of urgent lobbying from MPs, firms and industry officials following the rise of the Omicron Covid-19 variant.

It includes one-off grants of up to £6,000 per premises for businesses in the affected sectors in England, which the Treasury expects will be administered by local authorities and to be available in the coming weeks.

Meanwhile London’s streets remained nearly deserted with TomTom congestion data revealing the capital yesterday had its quietest weekday morning rush hour of the year, with a figure of 18 per cent in the 8am to 9am period.

The level for that period on a working weekday in the capital – including school holidays, but not bank holidays – has not been lower since December 31 last year when it was 8 per cent and London was under Tier 4 rules.

The congestion level represents the extra travel time for drivers on average compared to baseline uncongested conditions. This means an 18 per cent level results in a 30-minute trip taking 5 minutes more than with no traffic.

Reacting to Mr Sunak’s new support, Tim Rumney, the chief executive of Best Western Hotels in Great Britain said it ‘doesn’t go far enough’, and told BBC Radio 4’s PM programme: ‘It’s like a dud cracker on Christmas Day.

‘The support is always welcome but it just doesn’t go far enough to help us with the problems that we’re going through at the moment with the cancellations and the impact on the finances of hotels and hospitality.

‘What we would like to see is a reintroduction of the support package that was available during lockdown, so reinstatement of furlough, a commitment to extending the VAT relief beyond April 1, preferably reducing it down to 5 per cent which he saw initially, and a suspension of business rates.

‘The problem that hotels and hospitality are having is cash flow. December is the most important month of the year for many businesses and it sees us through the first quarter of next year.

‘A £6,000 grant really goes nowhere near protecting the cash position of our members in Best Western and of the wider hospitality industry.’

Surinder Arora, founder and chairman of the Arora Group, the largest private owner/operator of hotels in the UK, has also been left unimpressed by the package which he said would not give much help to larger companies.

He told BBC Radio 4’s Today programme: ‘The Government are in a tough position in a sense, they’ve had to decide very quickly last year whether it was furlough and business rates and VAT and other things, and sadly this time I think they seem to have taken their eye off the ball, and it is very tough.

‘And I’ve heard a couple of other speakers mention ‘sticking plaster’ and other things, and it really doesn’t even go as far as that.

‘I really wish and hope the Government would look at this urgently and support businesses such as ours – not just smaller, medium sized businesses, but when you’re talking about £5,000 or £6,000 support for a business.

‘If I was just to mention one of my hotels, for example, the rateable value is nearly £6million a year. You’re paying about 50p in the £1. So the business rates alone for one hotel are about £250,000 a month. Where does £6,000 take year? 

‘I was querying it with one of my team members last week and I was saying ‘well surely we wouldn’t be paying the full rate now when the business is on its knees’. And they said ‘no, the way the rateable value works, sadly, they look at the turnover in the business from 2015/16’.

‘Well surely that can’t be right, and this is where I think the Government really have to help not just hotels but other businesses from a business rate point of view. We thought that we might get some relief from the VAT side, because we want people coming in.

The Government also intends to use taxpayers’ cash to cover the cost of statutory sick pay for Covid-related absences for firms with fewer than 250 employees.

Cultural organisations in England can also access a further £30 million funding during the winter via the culture recovery fund, the Treasury said.

Mr Sunak’s announcement follows crisis talks with business leaders after he cut short a Government business trip to California. 

But Coral Rose, chairman of the Federation of Wholesale Distributors, told BBC Radio 4’s Today programme: ‘Wholesalers have not received anything with regards of business rates relief since the start of the pandemic in 2020 so we were very much looking forward to Christmas this year being the start of our recovery from 2020 and the losses that we incurred there.

‘And we’re now seeing that we’re stocking up our warehouses to make sure that we had plenty of supply for what looked like a busy season, that we’re now being left with in our warehouses. We bear the cost as wholesalers, we of course try and see what we can sell and clear, often at below cost. We hate to see it go to waste, but we’ll give it to Feed The Community, to FareShare, to any other local communities and good causes. We don’t want to throw away good food.

‘The Chancellor did announce back in March the Covid Additional Relief Fund, a £1.5billion fund, where thanks to the campaigning of the FWD he specifically referenced that wholesalers should be included in the allocation of these monies by the local authorities. 

‘That was in March, they were only released a matter of weeks ago so we’re going through the process of applying for those, and then the extra £102million Additional Restrictions Grant, it has been referenced that it should be allocated to those who supply the hospitality and leisure sectors.

‘But it’s a postcode lottery, we’re waiting for the local authorities to allocate those monies and it’s not always fairly distributed by them. We are grateful that the Chancellor has listened to our concerns, but we just want the local authorities to act quickly now.’ 

Businesses have seen takings plummet due to Christmas festivities being scaled back amid fear over the spread of Omicron.  

Prime Minister Boris Johnson said of the new funding: ‘With the surge in Omicron cases, people are rightly exercising more caution as they go about their lives, which is impacting our hospitality, leisure and cultural sectors at what is typically the busiest time of the year.

‘That’s why we’re taking immediate action to help with an extra £1 billion in grants to these industries and reintroducing our Statutory Sick Pay Rebate Scheme.

‘I urge people across the country to please get boosted now to secure vital protection for yourselves, your loved ones and your communities.’

Mr Sunak added: ‘We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time.

‘So we’re stepping in with £1 billion of support, including a new grant scheme, the reintroduction of the Statutory Sick Pay Rebate Scheme and further funding released through the culture recovery fund.’

The extra support builds on existing schemes in place to assist businesses, the Treasury said.

The devolved administrations will receive around £150 million of funding through the Barnett formula as part of the support announced, the department added.

This includes around £80 million for the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.

Asked why the Government is not bringing back furlough, Health minister Gillian Keega told Sky News: ‘Because people are still working. I went out for a family meal yesterday you know, the pub … not every table was full but most of it was. You know people are still going out and people are still enjoying themselves, so you know we’re trying to get that balance.’ 

The hospitality sector relies on Christmas sales for as much as a third of its yearly income and to tide it over through January and February. Critics welcomed the offer of help but argued the £6,000 grants would not be enough. 

Jonathan Neame, boss of Britain’s oldest brewer Shepherd Neame, said: ‘We welcome the fact the Government is listening but this seems inadequate to compensate for millions of pounds of lost sales.’

Des Gunewardena, who runs the D&D restaurant chain, said £6,000 would not even cover his restaurants’ Christmas decorations. 

He added: ‘Many of our larger restaurants lost £100,000-plus from cancellations last week. It’s the same again this week and heaven knows what’s going to happen to our New Year’s Eve.

‘So each of those businesses is facing £200,000-plus losses and has been offered £6,000 which doesn’t even cover the cost of our Christmas decorations.’

The Institute of Directors said the support will be ‘welcome relief’ to many businesses.

Policy director Dr Roger Barker said: ‘However, with the unwinding of a number of remaining support schemes at the end of Q1 2022, such as the VAT reduction for hospitality and business rates support, businesses also need the reassurance that these measures will now last for longer into 2022.’

Chief economist at the Confederation of British Industry Rain Newton-Smith said that any future lockdown measures must also be matched with further support.

She said: ‘The Government must monitor the situation closely and ensure that any new restrictions go in lock-step with further targeted cashflow support.’