This year,
UKHospitality predicts that revenues for December will be down a whopping 70% –
or £7.8bn across the sector – on December 2019 as venues struggle to make the
festive season merry within the confines of the Covid-19 tier system.
In a bid
to fix this, the government has offered a £1,000 grant to ‘wet pubs’ unable to
open because they cannot offer a substantial meal, a move that has been widely
derided by many in the sector.
Kate
Nicholls, chief executive of UKHospitality says it “does not even count as a
token gesture” as it amounts to just 1.1% of the average wet pub’s takings last
December. She predicts a “bloodbath on our high streets” if the issue is not
resolved.
So, what
needs to happen to prevent a nightmare before Christmas and an administration
horror show next year?
For
Michael Kill, chief executive of the Night Time Industries Association (NTIA),
venues such as nightclubs and music venues need two things from the government
– an exit strategy and a cash injection. “They need enough money to get them
through to the point where they can reopen and a resolution on commercial
rents,” he tells Property Week. “And they need that immediately.”
Kill says
the NTIA is also working with the government on rapid Covid-19 testing in
venues to allow them to reopen, as well as a solution to the insurance issue,
whereby venues are unable to insure events against the possibility of another
Covid wave or lockdown.
Kill is
concerned that if the government does not help night-time venues with these
issues, January will be a car crash for the sector. “It’s just going to be
catastrophic,” he says.
UKHospitality
is pitching a wishlist of solutions to the government. Top of that list is an
extension to the ban on commercial evictions, which the government introduced
in April to help retailers and hospitality businesses forced to shut down sites
due to the pandemic.
It is
calling for the ban, which was due to expire at the end of this year but on
Wednesday was extended until the end of March, to be extended until June.
Landlords will be forced to sue people to pay them or
they’ll go under
John
James, Soho Estates
“Our
concern is that [the latest extension to the eviction moratorium is] too short
a stay of execution to force the hand of landlords that are so far unwilling to
negotiate,” Nicholls told the FT on Wednesday.
UKHospitality
is also calling for 50% of rent debt to be waived for periods when businesses
were forced to close; the right for tenants to instigate a break clause to exit
their contracts at the end of June 2021 and have half their rent debt written
off; and a long-term commercial property review to address issues that hampered
the sector pre-pandemic such as upward-only rent reviews.
However,
not everyone agrees with UKHospitality’s approach. Soho Estates chief executive
John James criticises it as too simplistic.
“I have
waived rents, but I don’t think that’s what all landlords should do,” he says.
“Everybody has got to cut the cloth according to their needs. If the government
tells me I have to waive rent, what are they going to compensate me with? Or am
I just the whipping boy?”
James
also worries that the eviction ban extension could lead to lawsuits. “We at
Soho Estates are not bothered about when the eviction moratorium ends, but
other landlords don’t have that luxury,” he says. “They will either be forced
to sue people to pay them or go under.”
James
compares the government’s approach to a game of ‘pass the parcel’ in which the
cost of lockdown is passed around until it ends up in the lap of the landlord.
The problem, of course, is that if landlords start going bust, there will not
be anyone left to pass the parcel to.