finance

‘Tens of thousands of UK hospitality businesses’ could face closure within a year


A chilling scenario of tens of thousands of UK tourism businesses failing has been set out by a Sussex hotelier.

Harry Cragoe, who owns The Gallivant in Camber Sands as well as self-catering properties on the South Coast, said: “It feels like the government is taking the view that when hospitality reopens we will all be so focused on generating revenue, we won’t have the time to reflect on the damage lockdown has had on our businesses and our teams’ well-being – and will have temporarily forgotten the fact we have been haemorrhaging cash for months.

“I am quite sure that, after a summer bounce, a lot of businesses will be in dire straits, particularly as we head into the autumn with huge HMRC debts, rent arrears and falling seasonal demand – coinciding with more freedom to travel overseas.”

London saw average hotel occupancy fall from 90 per cent in July 2019 to 20 per cent a year later. “The loss of international tourism has been felt most severely in the capital,” the ONS said.

Southeast England was next most badly affected, with occupancy no more than 50 per cent even in August 2020 – when no domestic travel restrictions were in place.

Mr Cragoe said: “By the end of 2021 or spring 2022, the effects of lockdown and the untold damage it has wreaked will be very apparent with tens of thousands of once-thriving hospitality businesses closed and millions unemployed.

“I fear there is an economic and social tsunami heading our way. I hope I am wrong.”

In common with some big UK holiday companies, including Center Parcs and Forest Holidays, the hotelier is taking bookings from 8 March.

Butlins is hoping to reopen its holiday parks in England on 15 March.

Kate Nicholls, chief executive of UK Hospitality, said: “Businesses have been either closed or trading with severe restrictions for almost a full year. In that time, bills have continued to go out and, in many cases, debts have stacked up.

“Getting open again is just the first challenge for our sector. We need hospitality to open as soon as it is safely possible in order to give businesses the best chance of survival. That will be the first step. We will still need solutions to issues like the mountain of rent debt that has piled up for many businesses.

“The government can make the sector’s chances of survival much better by extending the VAT cut and business rates holiday. That will give businesses the breathing room they desperately need. Even so, it will still be a precarious year for hospitality.”

A DCMS spokesperson said: “We have provided an unprecedented package of support measures worth billions to the hospitality and tourism sector, including a VAT cut, business rates relief exemptions, the job retention scheme and loan schemes.

Boris Johnson will set out the initial stages of unlocking in England on Monday 22 February.

Patricia Yates, director of VisitBritain, said: “The prime minister’s timeline due on 22 February should give businesses some certainty on when they can plan for reopening and also to see what restrictions will continue to apply.

“Businesses have not had any cash-flow for months, many may not be able to open economically with Covid restrictions and it is likely to be a slow build back for the sector.

“Likely to do well are coastal and rural destinations, outdoor attractions and self-catering, more difficult will be indoor attractions and city centres.”

Harry Cragoe added: “For businesses to survive they need to think creatively and like us, pivot their offer so it aligns to the different needs of the customer post-Covid and more than ever before focus on how to improve that offer and provide genuine happiness and an experience rich escape.”

The train operator Grand Central, which runs on the East Coast main line from West Yorkshire and northeast England to London, has tweeted: “Here’s hoping Boris gives us all some good news next week.”





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