Hospitality firms are ramping up calls for support from the Government as the spread of Omicron and health warnings wreak havoc on hard-hit pubs and restaurants.
UKHospitality boss Kate Nicholls has made a plea for business rates relief and VAT discounts to be extended, warning that the sector has been knocked harder than expected by the new restrictions.
She said hospitality sales have already plunged by more than a third over the last 10 days with £2 billion of trade already lost in December.
The rapid rise in Covid-19 cases as the Omicron variant sweeps the country has led to a surge in booking cancellations.
Consumer confidence has been knocked by new restrictions and increasing health warnings.
England’s chief medical officer Professor Chris Whitty has advised Britons to consider cutting back socialising around Christmas, while Prime Minister Boris Johnson said people should “think carefully” before going out to celebrate.
Ms Nicholls said: “It is quite clear that the impact of the current guidance and restrictions has been more hard hitting on an already beleaguered hospitality sector than expected.”
She added: “It is imperative that local authorities release the discretionary grants and rate relief they have to affected businesses immediately and VAT and rate relief support is extended and not turned off prematurely.”
Firms across the sector are asking for an extension of the discounted 12.5% VAT, which is due to revert back to the original 20% rate in March next year, with UKHospitality also pushing for a deferral of business rates.
She said the group was working with the Treasury and across government to help ensure support is maintained for the sector.
Rain Newton-Smith, CBI chief economist, added: “Further support for struggling firms will be needed if fresh government public health measures prevent firms trading their way to recovery.
“Cash is king, so helping affected firms with cashflow, by ensuring unspent local authority grants are distributed to firms, giving firms more headroom to manage their coronavirus debt repayments and considering measures to reduce the fixed costs of businesses where demand is severely affected should be on the table.”
Michelin-starred chef Tom Kerridge has highlighted the suffering in the sector when he revealed one of his restaurants has seen more than 650 cancellations in the past six days due to Omicron fears.
The chief executive of pub and brewery Shepherd Neame said his business had been thrown into a “zombie world” by current concerns and government messaging.
Jonathan Neame told Times Radio: “We’ve seen a significant number of cancellations and that’s accelerating every day, and will accelerate even further after the news last night, which seems to have thrown us back into that sort of zombie world of the first week of March, of the pandemic last year.”
Dominic Paul, chief executive of takeaway chain Domino’s Pizza, said parts of the hospitality industry “are going to have a really tough few months”.
He added: “The Government showed a real willingness to support the industry before and I think they probably will again.”