Boris Johnson first advised the UK public to “avoid” hospitality sector spaces – including pubs, bars, hotels and restaurants – a lifetime ago, on 16 March.
A lot has changed in the eight weeks since he gave that speech, not least the introduction of protections for employees and businesses in vulnerable sectors like hospitality.
The Chancellor quickly announced financial support via the Coronavirus Job Retention Scheme and government-backed loans.
For many working and running businesses in the hospitality sector though, governmental support has been difficult to access.
Hospitality workers are some of the lowest-paid and lowest valued in the country. Employees in the hospitality sector usually have few protections and fewer benefits – many are paid minimum wage (the hospitality sector has the highest percentage of low-wage workers in the UK) and are on zero-hours contracts (around 20% of all accommodation and hospitality workers). I know from experience that many more are without a formal contract of employment at all.
While the furlough scheme has been a lifeline for many hospitality workers and small businesses, I’ve also heard personal stories of people being laid off from restaurant jobs at short notice and with no financial protections – as in the case for nine employees of popular Leeds restaurant Salvo’s.
Other friends were luckier. After firing their entire workforce without notice amid the initial panic at the closure of restaurants, one local fast-food joint (which I won’t name here, for obvious reasons) then re-hired their staff once the furlough scheme was clarified. But how safe can employees feel in a job that will likely disappear as soon as the furlough scheme is revoked?
Along with a low-paid, high-turnover workforce, hospitality businesses – particularly small ones – are characterised by a heavy reliance on cashflow. Your local pub, family-run restaurant or scrappy street-food startup just isn’t able to have money in the bank for a rainy day.
While the government were quick to announce the provision of resources, some businesses have reported a delay in accessing funds.
My husband runs an independent food business in Leeds and York. Restaurant income went to zero almost overnight, but they still had to pay rent. “Cash flow has been difficult” he worried, “particularly with the delayed payment of grants. Bills for stock bought pre-lockdown still needed to be paid and there was no income. We sold gift vouchers and liquidated existing alcohol stock by selling it at cost-price, we started doing takeaway and delivery, which we are now adapting as a more permanent business model.”
During Sunday’s much-anticipated address to the nation, the Prime Minister introduced a ‘three-phase’ plan for ending the lockdown. Reopening the hospitality industry is part of the final phase to return.
Even when restaurant doors do open again, social-distancing measures will remain in place (whether formally or informally). This will vastly reduce the number of people a restaurant can seat and, in turn, their profit margins.
Restaurants may be able to maintain some of the coping mechanisms they have employed during the lockdown – selling merchandise, offering a takeout/delivery service, selling memberships – but that won’t sustain them forever.
With the restaurant sector one of the hardest hit during the 2008 economic recession, and even more reason for the public to shun eating out in the months and years following the pandemic, hospitality workers and small businesses are facing a worrying future. Now is the time to support your favourite restaurant – or it might not be there when you are finally able to go out to dinner.
Zoe Pickburn
Featured image courtesy of Pablo Merchan Montes on Unsplash. This image has in no way been altered. Image license is available here.
