Pub, bar and hotel bookings in the UK have plummeted due to the public fear of coronavirus, according to trade body UKHospitality, which is asking the government to freeze business rates to provide relief to the sector.
Hotel occupancy has fallen 15% while eating and drinking out has declined by 7%. The trade body also warned that forward bookings across hotels, restaurants, pubs and bars for the next two to three months has fallen by around 50% compared with the same period the year before.
In an effort to help on-trade groups recover, UKHospitality has called on the government to provide business rate relief and cut VAT for hotels and tourism companies to “incentivise bookings”.
Ahead of UK chancellor Rishi Sunak announcing his first budget on 11 March, the trade body has asked the government to:
- Freeze business rates for a minimum of 3 months, “extendable dependent on the extent of virus spread”, and has suggested that any area that does end up being quarantined should have business rates “annulled for the period of non-trading”
- Delay payments on business rates, such as on Value Added Tax , Pay as You Eran (PAYE), and National Insurance Contributions (NICs) to ease cashflow for employers
- An additional VAT cut for hospitality and tourism businesses, to “incentivise bookings, so that trade can resume as quickly as possible when the virus threat subsides
The warning comes just as there are signs the on-trade is starting to recover after years of slowdown. According to a report from CGA and AlixPartners, the rate of pub, bar and restaurant closures fell by 1.8% in the 12 months to December. It is the slowest rate of decline reported since March 2018.
While independently-owned sites closed, number of group-owned restaurants actually rose 1.8% last year, on the back of small to medium-seized chains opening across the UK. Birmingham, Bristol, Edinburgh, Glasgow, Liverpool and Manchester all saw a net rise in on-trade establishments.
But across the UK, and particularly in London, restaurants and bars are now dealing with a sharp drop in footfall as fear of an epidemic has kept diners from making bookings. Speaking to Bloomberg, Des Gunewardena, the chief executive of Angler and Coq d’Argent-owner D&D Group, said his core business has fallen by 10% in the past week, and “our view is that it will potentially get worse.”
AlixPartners’ managing director, Graeme Smith, said the coronavirus’ potential impact on trading would lead to fewer investments in the sector, and therefore, far less growth this year.
Chief Executive Kate Nicholls said: “There has been a significant impact on the sector. Bookings are down, footfall is down, and all signs point to it getting worse before it gets better.
“This is now an emergency for our sector. If the government doesn’t act to mitigate the impact and give us support, businesses are in danger. This means cash flow becomes a problem, venues are under threat and jobs at risk.
“By the time the immediate threat of the virus has subsided it may be too late for some businesses. Support is needed and it is needed now.”