Hospitality businesses and trade bodies are calling for the chancellor to introduce emergency support measures as surging Omicron cases impact pubs and restaurants.
According to a survey by the Tourism Alliance for the Department for Digital, Culture, Media and Sport, 51% of businesses in the sector lost more than half their expected revenue in December.
Almost six in 10 had experienced at least a 25% cancellation rate, and a quarter said they had no cash reserves to cover the shortfall. Just over a tenth said they were “very likely to fail” and 29% thought they were “quite likely” to go out of business.
The alliance comprises members from pubs, restaurants, hotels, holiday operators and visitor attractions, and was asked by DCMS to provide data to the Treasury to make the case for industry support.
The government is yet to confirm whether additional restrictions will be introduced in England, but has discouraged people from socialising indoors, leading a number of hospitality bosses to claim there is an “unofficial lockdown” or “lockdown by stealth”.
Restrictions at work
With government guidance in England having returned to work from home where possible, pubs and cafes have also suffered from a sudden drop in commuter business.
If there are further restrictions, these could be introduced after Christmas and reports suggest they could be “light touch” controls such as limiting household mixing, curfews and social distancing, which would still impact hospitality businesses heavily.
UK cases of the Omicron variant grew by more than 80,000 on Sunday (19 December), a 72% jump on the number of new infections the Sunday before. In London, where mayor Sadiq Khan has announced a major incident, cases are reported to be up by as much as 500% among young adults.
Additional restrictions have already been introduced in Wales – where workplace social distancing has been mandated for those who cannot work from home – and Scotland, where gatherings are limited to three households.
Kate Nicholls, CEO of UKHospitality, said she feared that further restrictions would cause “social and economic harm” and that she “struggle to understand why we are still using last year’s interventions” when many people are now triple vaccinated against the virus.
Shadow chancellor Rachel Reeve said it would be “essential” to introduce more financial support if restrictions are tightened, including sick pay for those who must self-isolate after testing positive.
Last week the International Monetary Fund recommended that furlough should be reintroduced if lockdown measures come in, albeit on a sector-by-sector basis.
The TUC has also called for the government to extend statutory sick pay protection to every worker by removing the lower earnings limit of £120 a week and increasing the amount of pay to be in line with the national living wage.
General secretary Frances O’Grady said: “No one should be forced to choose between doing the right thing and self-isolating or putting food on the table.
“It’s a monumental failure that nearly two years into the pandemic, this vital public health tool has been ignored time and time again by the government.
“As the Omicron variant rages and coronavirus cases sweep across the country, it’s time ministers came to their senses and finally delivered decent sick pay for all. That means statutory sick pay you can live on and making sure everyone has access to it.”