Half of restaurants and hotels forced to shut during lockdown may not have enough cash to get through the next three months, official data reveals
- ONS today published latest business survey data for period from 14 to 23 Dec
- Many surveyed food service and accommodation firms shut over period
- But, restaurant owner Sam Berry in Surrey tells MailOnline he’s still hopeful
Over three-quarters of businesses in the accommodation and food service sectors, including hotels and restaurants, experienced a drop in profits and turnover over the last few weeks compared with expectations in normal times, new data suggests.
The Office for National Statistics found that half of businesses in the accommodation and food service sectors who took part in the latest poll had less than three months’ worth of cash reserves left.
Twenty-eight per cent of surveyed accommodation and food firms said they had no or low confidence that they would survive the next three months, the ONS’ latest voluntary fortnightly business survey covering the period from 14 to 23 December said.
Suffering: Businesses like restaurants and hotels have been hard hit by the pandemic
Sector updates: A chart showing turnover and profit results in different sectors over a select period
In the latest survey period covered, 41 per cent of businesses in the accommodation and food service sectors were temporarily closed or paused trading, compared with 13 per cent across all industries .
The ONS said today: ‘When splitting the industry into finer detail, the accommodation industry had 28% of its businesses temporarily closed or paused trading, compared with 43% in the food and beverage service activities industry.
‘We’ll continue to grow and learn from this experience’
Restauarnt owner Sam Berry spoke to MailOnline about his experiences over the past year
Determined: The No 97 restaurant team are determined to plough on and thrive
Speaking to MailOnline, Sam Berry, owner of the No 97 restaurant in Surbiton and One One Four restaurant in Teddington said: ‘At the moment, we’re all navigating this difficult period together. 2020 has been a crazy and unpredictable year.
‘The hospitality sector along with many others has been hit hard by Covid-19 and has definitely been an interesting, confusing, and often frustrating time for us!’.
But, he added that he and his team had leaned a lot from the experience and is convinced that thinking positively in tough times helps people and businesses become stronger over time.
Mr Berry said: ‘We have learned to adapt quickly, think on our feet, move with the times on short notice, keep our customers happy and stay ahead of the trends to keep our restaurants alive and of course take nothing for granted.
‘Never in a million years would we have thought we would be offering fine dining takeaway meals from No 97 and OneOneFour – but here we are, a year on, providing at home five course takeaway tasting menu for our amazing and loyal customers in the comfort and safety of their own homes.
‘There is light at the end of this long, unpredictable tunnel. We will continue to grow and learn from this experience and if we were able to get through last year – I have all the faith in the world that we will continue to adapt and survive going forward.
‘The latest lockdown is of course another devastating blow for us but if everyone respects the rules we can hopefully start getting some normality back in our lives in the not too distant future.’
‘The arts, entertainment and recreation industry and the education industry (private sector and higher education businesses only) had the next highest percentages of businesses temporarily closed or paused trading, at 23% and 20% respectively.’
Open or closed? A chart showing the proportion of firms surveyed in the food service and accommodation sector open or shut
Business impact: A chart showing that 41% of businesses surveyed in the food service and accommodation sector were closed between 14 to 23 December
The proportion of people on furlough leave across all industries has fallen from 16 per cent between 16 to 29 November to 11 per cent in the latest period, the ONS said.
It also revealed that 16 per cent of businesses intend to use increased homeworking as a permanent business model in future.
The hospitality sector has been hammered by the pandemic, with all manner of companies including hotels, bed and breakfasts, nightclubs, pubs, restaurants and cafes forced to stop-start their businesses since lockdown started in March last year.
Amid a new stringent lockdown, earlier this week Chancellor Rishi Sunak announced a fresh £4.6billion support package for embattled businesses.
What’s been happening? Impact of Cobid-19 on business profits in recent weeks
Sunak said the Treasury would dole out £4billion worth of one-off ‘top-up grants’ for around 6,000 companies in the hospitality, retail and leisure sectors, with each firm able to receive up to £9,000.
In response to the new finance package, UK Hospitality boss Kate Nicholls, said: ‘This is obviously a very positive step to keep businesses afloat in the immediate term and, for that reason, must be welcomed.’
She added: ‘However, while this announcement is most welcome, make no mistake that this is only a sticking plaster for immediate ills – it is not enough to even cover the costs of many businesses and certainly will not underpin longer-term business viability for our sector.
To address the inevitable and existential challenges that hospitality faces, we need confirmation of extensions to the business rates holiday and of the 5% VAT rate.
‘On its own, today’s support is not enough. Businesses need a longer-term economic plan and it would befit the crisis that we face if the Chancellor brought forward his Budget to make the announcements necessary to reassure businesses and allow them to plan their survival. Commercial certainty cannot come soon enough and only the Chancellor can deliver it.’
Figures published by the ONS in December revealed that there were 819,000 fewer workers on company payrolls in November than at the beginning of the pandemic.
Hospitality was the worst hit sector, accounting for a third of the job losses, followed by retail, the ONS said last month.
The country’s unemployment rate rose to 4.9 per cent in the three months to October, with the jobless total up to 1.7million people. Redundancy levels also hit a record high over the period.
‘Stop-start Government restrictions have been tough’
Speaking to MailOnline, a spokesperson for The Talbot Inn hotel in Ripley, Woking, said: ‘Like many hotels, The Talbot has suffered from the “stop start” nature of the government restrictions.
‘After the initial lockdown in March , the hotel spent significant time and money to ensure that it was a Covid secure environment for both customers and staff and enjoyed some return of business in July and August, however the introduction of the tier system, Lockdown 2.0 and having to close for Christmas and New Year put paid to any recovery and sadly the hotel is now shut awaiting a date for re-opening.
‘We feel truly sorry for the teams who have worked so hard to do everything to make the hotel safe and whilst thankful for the furlough scheme that can continue to pay some wages, this does not make up for a loss of hours for those on more casual contracts.’
The spokesperson added: ‘We can only hope that the vaccination roll out allows the restrictions to be lifted as soon as possible and our hotel and others like it to re-open in time for the Easter and the key summer months.’