Hotelier urges for help following latest Covid-19 advice
Jamie Shail owner of Rothay Manor, a 19 bedroom hotel and restaurant in the Lake District, says help is needed for the UK’s hospitality industry in light of last’s night’s statement by the Prime Minister regarding Covid-19.
Jamie Shail, owner of Rothay Manor, a 19 bedroom hotel and restaurant in the Lake District, says help is needed for the UK's hospitality industry in light of last's night's statement by the Prime Minister regarding Covid-19. In a statement, he said:
"As an individual I’m concerned about the spread of Coronavirus and as a small business owner I’m really concerned about the lack of tangible action being undertaken by the government in respect of Covid-19.
"This level of panic is unprecedented, both for individuals and businesses and nobody seems to know how this will all play out and that obviously creates real uncertainty across the board.
"There’s no doubt that the situation is fluid and totally unpredictable, it is without doubt posing a huge number of very important societal questions mainly because we simply do not know the length, extent and total impact of COVID-19.
"One thing is certain, it is clear that we need to keep people safe, we must be responsible, thoughtful and be prepared to adjust our behaviour as the situation merits.
"But to my mind there are a number of questions that I feel need to be answered.
"Last night the Prime Minister effectively decimated the UK’s hospitality sector and advised people to make some significant behavioural changes, avoid pubs, clubs, restaurants, cinemas and theatres, though they stopped short of ordering those businesses to close. He said he hoped these venues would take a responsible approach. But that statement does nothing other than leave us all in a strange limbo, which could last for weeks or months.
"Which, when you consider that nationally the hospitality sector employs some 3.2 million people and in Cumbria it contributes just under £3 billion to the region’s economy, employs 37,796 full time equivalent (FTE) posts. But given that many tourism jobs are actually part time, or seasonal, the total number of people employed in the sector is estimated to be nearer 64,992, about 20% of the county’s total employment.
"The obvious question to my mind is what is the government going to do to help the hospitality sector?
"Yes, Chancellor Rishi Sunak announced a raft of interim measures designed to help the hospitality sector but in reality, thousands of businesses in the sector simply won’t benefit or even be eligible.
"Yes, companies with a rateable value of less than £51,000 will be eligible for a tax holiday, as outlined in last week’s budget but what about the rest of us whose business rates are way larger than that?
"Scaling up of HMRC's "Time to Pay" service, including a new helpline so businesses and the self-employed can arrange to defer tax payments is welcome too, as is the fact that businesses with fewer than 250 employees can reclaim the cost of providing Statutory Sick Pay to employees off work due to the Coronavirus.
"But the reality is very different for the sector, we rely on visitors staying and guests dining - without them basically visitor attractions, cafes, hotels and restaurants have no business. Without a backstop we can’t operate, especially when we don’t know how long potentially this might last for.
"Many insurance companies simply don’t cover businesses that are affected by Covid-19, primarily because the virus wasn’t declared as a notifiable disease in the UK until earlier this month. Insurance companies have confirmed that they will only cover diseases already specified in insurance contracts, neatly side stepping the elephant in the room and leaving many businesses with no recourse.
"It’s great that a new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch in a matter of weeks to support businesses to access bank lending and overdrafts but how on earth will these loans be repaid, even with a Government guarantee to lenders of 80% on each loan many businesses will simply be unable to operate with additional levels of debt.
"The hospitality sector is a huge part of the UK’s economy and at this moment in time we have no idea what is going to happen to us. There are rumours of leaked papers outlining the enforced closure of pubs and restaurants and if this is the case then we’ll deal with that. But I like many in the industry want to know what will be in place to help us recover.
"Rural areas across the UK rely on tourism income and we are about to be doubly decimated having lost 15% of our total visitor numbers who are from overseas and it would seem we may well lose our staycation market too if movement restrictions are imposed for who knows how long. Currently there seems to be scant communication from the powers that be about what they are doing to protect one of the largest employment sectors in the region?
"So with all that in mind I’m looking for some answers. This might appear selfish but I’m thinking of the longer term future of my business, the future for my dedicated team of staff and their families and the suppliers we work with, who too no doubt are wondering how we are all going to get through this.
"We are all facing a very stark reality. We may well be forced to shut our doors as the authorities seek to limit the spread of the virus and we will all have to see what happens next but I for one would like it to be on a level playing field for businesses of all sizes across the country.
"In the current circumstances wouldn’t it be prudent to allow for a temporary relaxation of the Pay As You Earn (PAYE) rules for businesses? Primarily to allow businesses to continue to pay their staff something rather than be forced to lay them off after a period of time because we can’t meet our tax and national insurance obligations, after all isn’t providing something better than nothing?
"Which is why I would like to see the immediate suspension of business rates payments for all hospitality businesses until this time next year and I would like the Government to provide businesses with short-term subsidies to cover staff wages where trade falls markedly or ceases completely due to enforced closure.
"I firmly believe (as I explained to the bank today) that delaying loan repayments or anything of that ilk may look like it’s helping but in reality, all it does is move the problem to a date further down the line. The impact of this situation simply isn’t going to go away. Once these days / weeks / months have passed they are gone they can’t be resold – there’s simply no way of recouping the lost income, there’s just no way of moving the nights lost to another month – it doesn’t work like that!
"Ultimately if we are stopped from trading and have to resort to taking out loans to see us through many hospitality businesses will never recover. They will perpetually be financing the loans taken out to survive Coronavirus and certainly won’t be in a position to recoup the lost revenue or for that matter trade in the winter months. Without some real support, the hospitality industry is going to fare very badly in the medium to long term, with many of its small hotels suffering adversely and ultimately closing.
"We need help now."