Hospitality: a sector in need of love

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Hospitality: a sector in need of love

It’s fair to say the hospitality sector hasn’t had an easy ride during the last couple of years. The devastating combination of lockdowns, travel restrictions and staff shortages has seen revenue plummet. According to UK Hospitality, by the end of 2021, 10% of outlets had permanently closed, 30% of jobs been lost (over 660,000) and over two thirds of revenue had been lost (over £100 billion).

As 2021 drew to a close, there was hope among the industry that the traditionally busy festive period would kickstart the sector’s revival. Yet, predictably, another variant stopped any optimism in its tracks.

With Omicron a well-established force, diners proved uneasy about the prospect of eating out, opting instead for family time at home, which was so sorely missed last year.

As we move into 2022, losses from the winter period and lack of government aid, combined with intense staffing shortages has added to the rising pressure felt by many businesses.

However, all is not lost.

During the “Eat out to help out” scheme in August 2020, we saw a clear demand for the dining experience, with a Hospitality Leaders Poll reporting that 80% eateries said it had proved to be a successful scheme.

The scheme owed its success in large part to the lease moratorium extension as rent stability for prime-holding landlords combined with a post-lockdown surge significantly increased demand.

As we approach the end of the moratorium in March, we are likely to see some churn but we do not expect a ‘bloodbath’ of sites coming back to the market as once anticipated.

There will be some operators that seek additional support from landlords and, as ever, clear lines of communication between landlords and tenants will continue to be critical in navigating the rocky road ahead this year.

Moving forward, the rise of the staycation should have a positive impact on businesses operating both in major cities and off the beaten track. Commercial tenants can take advantage of capital payment holidays where useful, and the Commercial Rent (Coronavirus) Bill, which is currently at the committee stage in the House of Lords, should provide further relief and aid for businesses struggling to make rent payments due to coronavirus.

While it is going to be another rollercoaster of a year, there are plenty of reasons to remain optimistic. So, as we emerge from January book some meals out, go out for drinks and show the sector some of the love it has been desperately missing for the last couple of years.

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