- Easing of restrictions receives qualified welcome from trade body
- Staff and customers to benefit from partial return to normality
- Thousands of businesses still unable to trade viably
- New figures reveal sector is worst affected and most pessimistic in Scotland
New data shows that hospitality is experiencing the worst effects of the pandemic restrictions, and industry leaders are warning that even next week’s easing of rules won’t be enough to prevent further turmoil. Higher costs and lower revenues will mean that indoor drinking will only allow around half of the country’s 8000 pubs, hotels and restaurants to reopen on a commercial basis.
The figures, from the Business Insights and Conditions Survey (BICS), show that only 41% are currently trading and 76% have lower turnover than expected – more than TWICE the all-industry average. Nearly have (46%) say they have less than three months’ cash reserves, IF ANY, and 8% fear they won’t survive the next three months – more than TWICE the all-industry average.
The survey results were collated by the Office for National Statistics and published by the Scottish Government.
Scottish Hospitality Group is now demanding that the new Scottish Government takes decisive action in response to these figures. It is calling for immediate changes to:
- Base restrictions on hospital admission and mortality data not the number of cases given the obvious positive impact of the vaccine
- Lift restrictions quicker than planned as the latest data supports easing
- Align restrictions with England to avoid Scottish businesses being unfairly disadvantaged
- Continue grant funding for those businesses that are unable to trade viably, especially night-time and music venues.
Stephen Montgomery said: “Of course this is going to be welcome news for some businesses. It’s especially good for staff who can return to work and we know that customers are desperate to get out and about again.
“But no-one should be fooled by the recent sight of people drinking in beer gardens. Just like the weather we’ve had this May, there are still stormy times ahead. We’re going from a Covid pandemic into a debt pandemic. More businesses will go bust unless they’re given more help to get through.
“The First Minister has repeatedly said that they’d be driven by data not dates. Well, the data that really matters – which is how much impact Covid-19 is having on people’s health – could hardly be better and seems to be going in just one direction. So, she should bring forward the dates and allow us to safely enjoy the economic recovery that our counterparts in England are about to benefit from.”
The group has highlighted a range of factors that mean business costs will continue to rise significantly:
- Extra heating to compensate for doors and windows being open for extra ventilation
- Cleaning regimes requiring extra staff, more supplies and longer turnaround times
- One server per table and no bar service requiring extra staff
- Guest guidance and supervision requiring extra staff to greet and host customers
- Debt servicing and repayment, with an estimated £95k extra debt per site being carried by Scottish businesses
- Wage inflation caused by a shortage of staff
- The stopping of grant support at the end of April.
At the same time, revenue will be negatively affected by:
- No overseas tourism
- Restricted trading hours
- Very little footfall in city centres due to offices being shut
- Reduced capacity with social distancing measures
- Reduced capacity with a lack of outdoor space – only 25% of venues have any outdoor space and not all of those will be viable
- A lack of public confidence due to misguided public health measures and messages
- Weather, with the recent example of cold, wind and rain on the May Day Bank Holiday putting off customers.
