The government’s Plan B initiative to prevent the spread of Covid-19 will see hospitality businesses across the UK lose £4 billion of revenue in December alone, a report by UK Hospitality and Croydon Business Improvement District has found.
The hospitality industry predicts that takings will be down 40% - twice that in London - on pre-pandemic levels this month, as consumers cancel bookings amid rising concerns about the Omicron variant, which on Tuesday was confirmed to now be the dominant variant in London.
UK Hospitality reported that between Monday and Sunday last week (beginning 6 December) there was a 13% drop in business and a 15% increase in cancellations, compared with pre-pandemic levels.
Politicians and industry groups have urged the UK government to provide financial support to firms impacted by the rising Covid cases.
In a statement, Mayor of London, Sadiq Khan urged the government to “recognise the impact Omicron is going to have on our hospitality, culture, retail and leisure industries, particularly in this “golden quarter” period.”
At present, the UK government has not placed any restrictions on hospitality venues, but at a Downing Street press conference on Wednesday, Prime Minister Boris Johnson advised people to "think carefully before you go" out to socialise. Chief medical officer, Chris Whitty told the public “don’t mix with people you don’t have to”.
These statements prompted an outcry from economists, politicians, and industry groups who consider the government advice as tantamount to restrictions.
“If you’re telling people to avoid hospitality, it doesn’t matter if you’re not banning them from doing so - restaurants, pubs, bars are going to get stuffed,” said Torsten Bell, chief executive of the Resolution Foundation economics think-tank. “They’ll lose customers and workers will lose their jobs.”
On Twitter, Conservative MP Anne Marie Morris stated that if the government was “effectively telling people not to visit hospitality venues this Christmas then this needs to be accompanied by immediate sector-specific financial support”.
UK Hospitality has requested for an extension to the discounted VAT rate and for business rates due in the first quarter of next year to be deferred.
“The onset of omicron means many businesses seeking to get back on their feet are once again reeling from the virus for a second Christmas in a row,” said Rain Newton-Smith, chief economist at the Confederation of British Industry (CBI).
“Now the Government must act at speed to prevent the need for further restrictions. Implementing Plan B was the right thing to do – but it has dented demand and consumer confidence. And further support for struggling firms will be needed if fresh government public health measures prevent firms from trading their way to recovery.
“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.
“Having spent the last 20 months oscillating back and forth between open and closed, between freedom and restrictions, the key driver for confidence must now be seeking consistency. The Omicron variant is unlikely to be the final challenge the coronavirus poses the economy or the country. So, the question is: how do we learn to live confidently not just with the virus, but with its variants?”