Sector by sector approach essential for leisure and hospitality

6 May, 2020

Sector by sector approach from the government is essential as we start to rebuild the nation’s leisure and hospitality industry.

The generic approach of many of the Government’s Covid-19 initiatives to support businesses has helped hugely in the short term, but will not have the maximum impact moving ahead unless they offer more flexibility.

We believe the Government has done a good job overall, considering how much focus and attention must be, and should be on the NHS, however now is the time to start planning on a more flexible sector by sector basis to achieve the maximum benefit to businesses. Fortunately, we are starting to see this specific sector support from Government, who yesterday announced grants of up to £100,000 for licenced zoos and aquariums across the UK. This is a huge step forward for a sector that was struggling to support their animals with dried up revenue and donations, and it highlights that Government is starting to look at specific sectors and understand their particular needs, which is exactly what is needed and most welcomed.

The nation’s hospitality and leisure industries are going to need this adapted sector thinking in the battle to survive the consequences of the Covid-19 pandemic. Hospitality and leisure businesses are starting to make even more people redundant, which we believe is for two key reasons. The first being that they know they will be operating at reduced levels when they return to opening and will not need the same number of team members to service that demand. And secondly, employees are accruing holiday pay whilst furloughed, so for each day that passes with staff on furlough, businesses are starting to build up a large holiday liability. This is a serious issue for employers and needs to be urgently looked at to help reduce further redundancies.

We are also aware that operators have been forecasting their future model and whilst initially they were very keen to get open as quickly as possible, there is now a feeling that opening and only having 30-50% of customers, as is being seen in other countries, could be even more devastating. Currently, with Government support many companies in the sector can just about survive by staying closed, but once the lockdown is lifted if support is also lifted, the effects would be devastating. There will also be increased costs to hospitality businesses in the form of sanitisation and changing the way they operate. For example businesses that rely on a self- serve model will need to re-invest in their entirety, because shared services and items are not an option in this period without sanitising each time. The ‘new normal’ will have to see businesses moving to a ‘served’ model and away from the likes of buffet breakfasts in hotels or shared condiments in restaurants. Technology is also likely to incur a cost for many businesses. While it promises to play a part in the solution of easing lockdown, ordering apps and digitalising aspects of businesses will come at a cost for the industry.

These operational issues coupled with a probable change in customer behaviours, with reports stating 63% of people won’t feel comfortable visiting bars and pubs after lockdown, means that finding a middle ground that involves re-opening with continued Government support will be essential for the industry.

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