Weathering the lockdown storm within the hospitality industry

There’s no doubt that the Covid-19 pandemic has struck every sector in one way or another. But one industry that has had a particularly difficult time is the hospitality sector.

Temporary closures have become the normal across the industry, with 84% of hospitality businesses closing their doors during the lockdown. By comparison, 71% of construction industries did the same, followed by 60% of manufacturing businesses. Furthermore, 69% of hospitality staff have been furloughed, left to rely on the Coronavirus Job Retention Scheme (CJRS) as they wonder what comes next.

What comes next could very well be a bleak picture too. Catering Scotland conducted a digital forum recently, asking restaurateurs for their opinion on what the future held. The responses were clear: if the lockdown restrictions continue, most pubs and restaurants across the UK would be looking at company liquidation by the end of 2020.

There have been calls from industry leaders such as Nick Nairn and Tom Kitchin for the government to increase its support for the hospitality industry during this difficult time. With the unique nature of the sector, the pair have asked for the government to recognise that CJRS will need to be extended beyond October — with “further flexibility and phasing to support businesses until at least Q1 2021”.

As well as this, calls have been made for the government to create a 12-month rent-free period with reductions “for as long as social distancing is required in our premises” until well into 2021.

These proposed measures aside, another intriguing suggestion is for restaurants to be subject to a government-backed “Covid Quality Assurance Scheme”. The scheme would act as a reassurance to customers that the premises and owners have taken steps to protect them from the coronavirus.

“Put very simply, social distancing simply does not work in most restaurants, bars and hotels,” said Kitchin and Nairn in their proposal. “People visit to enjoy a memorable experience with a high level of service and personal interaction, and this could never be achieved if staff had to maintain strict social distancing and wear PPE.

“Hospitality already operates on a high cost base. In recent years we have faced additional spending including rent hikes, increased food and beverage costs, the new National Living Wage and higher business rates. Social distancing will result in revenue drops that will make most businesses unsustainable.

“There is also worrying evidence suggesting that many people don’t feel it’s safe to eat out and will avoid visiting us even after lockdown is lifted. Against this background, if furlough ends and restaurants, bars and hotels are allowed to reopen but with social distancing enforced and no income from major events and festivals, the result will be a tidal wave of business closures and mass redundancies, increasing unemployment and the strain on the welfare system.”

At the time of writing, 4th July appears to be the earliest date in which hospitality establishments in England can hope to reopen, though the situation is always changing.

The earliest official date that some establishments can look at reopening on in England is 4th July although guidance could change in the meantime. Plus, some franchises have been working a staggered roll-out of their reopening, albeit drive-thru only. Chains such as McDonald’s and Costa Coffee are operating a limited drive-thru service, with PPE and contactless payments a must.

PPE and contactless payments won’t be the only long-term changes witnessed when the hospitality industry can start to reopen in earnest. UKHospitality, an industry trade body, has submitted a 75-page document to the government to outline an approach to reopening the sector. Some key changes include removing salt and pepper shakers from tables, ending the tradition of customers standing at bars, and stopping staff tips. The document supports UKHospitality’s #FAIR4Hospitality campaign.

“The non-negotiable principle when it comes to reopening is that the safety of our staff and our customers is paramount,” said Chief Executive Kate Nicholls. “When the time is right for businesses to reopen safely, it’s essential that clear and helpful protocols are in place to help them get back up and running as safely as possible.

“The size and diversity of the hospitality sector means that there’s no one-size-fits-all approach to reopening.

“Across our industry there are many sub-sectors and widely different business models. The practical challenges in reopening faced by a pub or a bar will be different from those faced by a holiday park, for instance. Even within the same sector, there’s bound to be a huge difference in the size, shape, location and layout of similar businesses.

“We will be ready to restart in England on July 4th and other parts of the country when allowed, but for the whole country to come together again after lockdown, governments must invest in a fair and timely return for hospitality and all those who rely on it.”

Then again, no amount of outlines and campaigns can predict one major variable to the hospitality industry: how customer behaviour will chance. Lockdown has, after all, taught us all new habits, such as cooking from home more and relying on the likes of Uber Eats and Deliveroo. Will customers even want to return to an eating-out experience? Will they be too nervous to do so? With the convenience of home delivery mixed with concerns for health and safety, going out for a meal might just not feel worth the risk.

Some businesses clearly feel this might be the case, with the Casual Dining Group, owners of Bella Italia, Las Iguanas, and Café Rouge, filing for administration.

So, what can businesses do to embrace the impending “new normal?” Delivery services seem to be the key here, a once-appreciated branch of an eatery now rapidly becoming a staple for profits. Open-air street food services could also see a rise, removing the worry of multiple people being inside a cramped venue or basement bar. Then again, if a business has been built upon the “old normal”, there’s no shame in realising this model may not work in the future and closing the doors permanently to design a new hospitality venture that is prepared with social distancing in mind.