19 May 2022

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Will you be able to have your wedding? Hospitality faces perfect storm
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Will you be able to have your wedding? Hospitality faces perfect storm

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This could be the greatest test for the hospitality industry. Will it emerge the same as it was pre-pandemic?

The Prime Minister’s announcement that the lockdown will continue for another four weeks has thrown the hospitality industry into confusion and disarray.

The problem is greatest for those which have not yet been able to re-open following the previous liftings of restrictions simply because their premises are not suitable for social distancing style operation. But even for those who are, most are complaining that they are operating at a loss.

Where intense difficulties look like arising are with the landlord moratorium coming to an end at the end of June, the business rates discount reducing from 100% to 66% from 1st July, the furlough scheme “on the wane” as employers have to start paying more and the impending rise in VAT back to 20%, all quite apart from the normal business of having to pay one’s creditors.

And there are confusing issues like the limit on weddings of 30 attendees being lifted as long as social distancing is maintained. Actually what does that really mean? Well, unlikely that you will be able to have a wedding breakfast because that is catering and the venue will have to implement social distancing. So for a sit down meal, your guests will be at distanced tables of a maximum of six each. Many places will not be able to organise this and even if they can, is this going to be suitable? When the speeches are given, the speakers stand so in accordance with the rules they will have to wear face masks!

Of course the regulations could be tweaked here and there to ease things off but in essence weddings and wakes are fundamentally social events which do not lend themselves to social distancing measures so not much change there.

But the Chancellor of the Exchequer has so far refused to make any new funding plans available so this leaves a large number of businesses in a very parlous position. All the licensed premises which have not yet opened including the night time businesses are very much in financial limbo. Those that cannot pay their rent dating back over the past fifteen months are going to find themselves possibly without business premises at all – no premises no business. Landlords of course say that they have waited long enough.

The Prime Minister tried to put a brave face on it but it is now generally accepted that we have to live with covid-19 for the rest of our lives and although the theory of vaccinations catching up with cases has its merits, somehow I do not think it is going to work out quite as they would like. Can we really see social distancing being abolished in five weeks time? May be but really don’t hold your breath and above all don’t put any money or investment into the possibility that all will be well. We know well enough now not to rely on anything in this pandemic.

Where will this leave the licensed trade? As we have maintained throughout the pandemic there will be those who succeed and those who fail. Those who succeed will be the ones who are really exacting and work all hours God sends and those who fail will be the ones who cannot keep their heads financially above water and who will therefore inevitably have to cease operation. It will simply be a question of do they jump or do they get pushed?

Will we see a glut of insolvencies emerging? There is a very good chance of this happening and results for creditors could be poor – if landlords have seized properties, what will become of the contents which belong to the lessee? Distraint and forfeiture are two separate remedies open to landlords. They could start with distraint and then go for forfeiture later when they have recovered some money. Either way it does not bode well for tenants. Imagine the bailiff starts with your commercial kitchen equipment. That’s the end of a catering business.

If you are a tenant and find yourself in this position, it is time to seek professional advice – do not delay as things can get worse.

Adrian Leopard 15-06-21

Photo Francisco Suarez

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