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Hospitality Boss Warns London Restaurants Are Now at Risk of ‘Complete Failure’

UK Hospitality says that without a coordinated effort to encourage office workers and tourists back into central London, hospitality businesses are going to fail

BRITAIN-HEALTH-VIRUS-RETAIL-RESTAURANTS TOLGA AKMEN/AFP via Getty Images

Restaurant trade body UK Hospitality wants to see a new, coordinated campaign to encourage tourists and office workers back into London. A failure by policymakers to do so “risks [the] complete failure of [the] hospitality and tourism sectors,” such is the importance of those two customer bases for hospitality businesses, the trade body has warned.

In a letter to the Prime Minister and the Mayor of London, over 90 businesses have highlighted “the acute risk” to London’s hospitality and tourism sectors, as well as retail leisure and supply chains, if tourists and office workers are not encouraged back into the city.

UK Hospitality chief executive Kate Nicholls said: “The capital is at a very real risk of finding itself totally left behind the rest of the U.K. and global competitors. Around the country, life is beginning to return to some degree of normality. People are returning to work and hospitality businesses are slowly starting to bounce back from a disastrous few months.”

The letter — like the one written by the co-owner of St. John, signed by dozens of London restaurateurs last month — calls on local and national leaders to “put politics aside and deliver a coordinated campaign to support businesses reliant in these income streams and help save potentially tens of thousands of jobs.”

“Outside of London, we are seeing trading back to 70 percent of pre-COVID levels, in some cases,” Nicholls explained. “The case is much bleaker in London. Some businesses are struggling to hit double figures and the reality is that businesses are going to fail, with the associated job losses, if nothing is done.”

As as been known since early in the pandemic, central London restaurants, which rely on high footfall from both tourists and office workers, to sustain high rents and rates, were particularly vulnerable to lockdown and its effects on the movement of Londoners and visitors to the capital. “Hospitality and tourism businesses in London rely in large part on the twin revenue streams of tourists and office workers,” Nicholls observed. “[Tourism agency] Visit Britain’s latest forecast for inbound tourism to the U.K. in 2020 show[s] a decline of 73 percent in visits and a decline of 79 percent in spending. The estimated drop in London’s international tourism spend is £12 billion.”

Furthermore, and despite a government campaign designed to urge workers back into offices over the coming weeks, estimates show that only 30 percent of British workers have returned to their offices, with just 15 percent of businesses expecting the majority of staff to be back by the end of September.

Nicholls cautioned that unless action is taken to get people back into the city, “hospitality and tourism businesses, retail, leisure and supply chain businesses, which combine to provide 20 percent of all employment in London, will be ruined.”

She added that a joined-up plan between policymakers in national government and in the Mayor of London’s office must do all it can to return footfall back to central London’s restaurants and hospitality businesses. “Otherwise, we will see widespread job losses and the destruction of years of progress in establishing London as one of the world’s leading cities for commerce and tourism.”

While restaurants, particularly those in high rent areas, operate at lower capacities — with social distancing measures in place — with fewer customers, they also face the ongoing uncertainty over what happens to the rent they owe for the months they were closed, and unable to generate revenue, during lockdown. Despite efforts made by the likes of UK Hospitality on behalf of businesses, calling on the government to intervene and pay up to 50 percent of owed rent for the last six months, no action has yet been taken. As things stand, those restaurant tenants which were unable to pay rent during the pandemic, will be unprotected from eviction at the end of September, unless they have reached an individual agreement with their landlord. A month later, the government scheme protecting millions of jobs for restaurant workers will come to and, leaving thousands vulnerable to redundancy.

The Eat Out to Help Out discount scheme, alongside new permissions to trade outdoors, gave restaurants a boost in August. It’s now September and restaurants all over the city need more help.

St. John

26 Saint John Street, , England EC1M 4AY 020 7251 0848 Visit Website

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