66% of hospitality businesses ‘will not survive’ another three months of lockdown, study finds

Some 66% of hospitality businesses do not think they can survive a further three months of lockdown measures.

According to a study by Kam Media, which involved 211 hospitality companies – ranging from businesses operating pubs and bars to restaurants, cafes and street food venues believe they will not survive a prolonged lockdown without further far-reaching support from the government.

The vast majority believe a significant break or ‘holiday’ from rent obligations is required.

Katy Moses, managing director at KAM Media, said: “So many hospitality businesses are at risk and we need help in navigating a pathway to safety.  We need some fundamental interventions on rents and property, and on finance and loans, and it’s becoming clear that much of hospitality will require a much longer extension of the furlough scheme, given that businesses will not emerge fully from lockdown for some time. 

“As an industry, we need to get behind campaigns such as #NationalTimeOut, spearheaded by Jonathan Downey and Hospitality Union, who are campaigning for a nine-month rent holiday, to be supported by the government.”

Referring to this #NationalTimeOut campaign, the research showed that 87% of hospitality businesses do not expect to survive without the nine-month rent holiday or some equivalent, being introduced.

Kate Nicholls, CEO of UKHospitality, said: “The government has moved quickly to address some of the existential challenges that hospitality faces, brought by the crisis and lockdown, and as an industry we are extremely grateful.  

“However, this research underscores the scale of the challenges, which is reflected in the current mood of the industry.  We need far-reaching and continued support, and unprecedented intervention of the order of the proposed nine-month #NationalTimeOut idea or an equivalent concept of similar scale, in order for hospitality jobs and businesses to endure this crisis and to be there to drive the recovery.”   

According to the study, the hospitality industry is also expecting a long recovery time before sale returns to pre-Covid levels.  

Also, when lockdown measures are lifted, most companies (86%) said they thought consumers would eat out less, with 82% expecting consumers to drink out less.

Moses added: “We are very likely to see a much more cautious consumer coming out of this lockdown, at least in the short-term.  Although there will be a proportion who will run straight to a pub for a cold pint, many will stick to essential only social gatherings in a bid to keep themselves safe.

 “While we fully expect operators to respond with well-executed and communicated social distancing, and health and safety measures, it means that many will operate on drastically reduced capacity and this will place significant economic pressure on swathes of the industry.”