Confused Communications are Crippling Hospitality

Yet again we approach a festive period with dark clouds of uncertainty and worry gathering around the hospitality industry.?Mixed messages from government mean many consumers feel unable to go out resulting in high levels of cancellations or severely reduced footfall from working at home, the effect at this historically buoyant time of year could be potentially catastrophic for the independent operator.

By leaving hospitality open and unsupported but advising customers in effect not to go out and spend money, the politicians are slowly strangling the life from well run, creative, independent businesses whose only fault is not to have the scale or resources to outlast a pandemic.?That doesn't even begin to take account of the toll on the mental health, enthusiasm and energy of those owners.

Critics will say that everyone is hurting, and it affects everyone but in reality, hospitality is unique. In most cases it can't switch to an online offering, it relies on consumer confidence and even in boom times is limited in capacity so struggles to catch up financially in later times.?Hospitality has a huge array of fixed costs and requires investment in stock up front so sudden changes of circumstances are difficult to absorb.?Yes there is big money in hospitality as demonstrated by the purchase of Punch by Fortress this week and whilst I am the first to generally support a Darwinian survival of the fittest approach to business, I can't help feeling that the decks are unfairly loaded towards those who make their money elsewhere in other areas such as banking and finance, who undoubtedly have benefitted from central bank policies as witnessed by the current reporting of record bank profits.

In my own business, we are fully prepared for what comes next.?Being financially strong, with benevolent owners, having been around for 15 years previous to the pandemic and being exposed nationally rather in any one locale and to a wide range of sectors. ?Mangrove has continued to recruit, employ and have faith that the team will work every avenue to keep us moving forward, ?but it will inevitably hurt.?It will inevitably cause some sleepless nights and require some difficult decisions, all without any support as the supply chain doesn't qualify for most schemes and all for events totally out of our control.

For those that point to Furlough and CBILS or Bounce Back Loans as the solution, I think shows a lack of understanding of how the schemes work and what is involved.?Furlough allowed businesses to retain staff for a reopening, businesses still had to contribute and it is a slow bleed on resources.?If you have no reopening date or no certainty even this reduced cost can destroy businesses over time.?

The loans are just that - transferring debt to businesses which need to be paid back for something that the Government mandated sits a little bit uncomfortably.??At this point, I will declare I don't have all or any of the answers but some sort of tapered relief or future allowances may be a workable solution plus a sustained reduction in VAT maybe for those companies who need it the most (although I imagine for simplicity that is retrospective).

Without assistance, the risk is one of huge business failure across the sector and the narrowing of choice and creativity from a consumer point of view.?There will be winners and losers inevitably and people will argue that the pandemic accelerates the inevitable, but this feels so manufactured by policy and sound bites that the playing field isn't level.

I hope that the work of those far cleverer than myself find a solution to help those most in need in the sector I love and that Government will turn its attention to the industry which contributes so much.?

https://www.bbc.co.uk/news/business-59675031

https://www.theguardian.com/business/2021/dec/15/punch-pubs-sold-us-private-equity-group-fortress

https://www.standard.co.uk/news/uk/hospitality-help-reduce-socialising-chris-whitty-omicron-variant-boris-johnson-b972276.html]