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Thanks Rishi… but we need more! Industry reacts to furlough extension

The industry has welcomed the extension of the government furlough scheme to October – but says further support will be essential.

Chancellor Rishi Sunak confirmed that employees will continue to receive 80 per cent of their monthly wages up to £2,500 until October, with the government asking companies to start sharing the cost of the scheme from August.

Lex Butler, chair of the HBAA, said the extension of the job retention scheme would save thousands of jobs – but added that further support is essential for the sector’s survival.

She said: “The extension of the job retention scheme to the end of October, without change until the end of July, will save thousands of jobs in the events, hospitality and travel industry as many staff would have been made redundant at the end of June. The industry would have been decimated.

“We’re delighted to hear that from August there will be flexibility and the scheme will allow workers to resume part time to help businesses get going again. This is crucial for our recovery.

Every assistance to survive

“We welcome this extension wholeheartedly but, as this industry will be one of the last to be trading fully again, not until next year, businesses in the sector will need every assistance to survive – commercial rent relief, support for sole traders and those who take dividends as part of their income, plus the continuation of Business Rates Relief and the Business Interruption Loans Scheme are essential. Of course, this extension must go hand-in-hand with noticeable industry recovery, otherwise we will find ourselves in the same situation at the end of the time.

“We want to get Britain meeting, to ensure that the Government fully understands what powerful role this £70bn industry plays in the UK economy; and we will continue to work hard with other industry associations to gain the financial support we need for its continued existence.”

Jane Longhurst, chief executive of the Meetings Industry Association, also welcomed the news.

She said: “The mia welcomes today’s announcement by the Chancellor of the Exchequer that the Government’s furlough scheme will be extended until the end of October.

“Having highlighted the particular plight of our sector, we are grateful that the Government has listened, and from the start of August the scheme will have greater flexibility to allow employers to bring furloughed employees back part-time.

“Without the extension, our recent research was predicting 8,402 job losses of skilled and unskilled workers among our 800 mia members alone.

“We now await further clarity later this month on how employers will start sharing the cost of paying the salaries with the Government.”

Enormously ambitious

Jane Pendlebury, the CEO of HOSPA, the Hospitality Professionals Association, welcomed the extension but added that the prime minister’s suggestion that hospitality businesses could begin to reopen in July was “enormously ambitious”.

She said: “If you’re blessed with a spacious outdoor area – and good weather – then providing a food and drink offering is much more feasible. If not, however, the necessities of social distancing will prove very problematic; problems that are only enhanced by the diversity within our industry.

“Using hotels as an example, a country house hotel offering a rural retreat will have much greater scope to reopen in July than a central London hotel. Many UK residents will no doubt be eager to escape to the country in the advent of lockdown lifting, so these hotels can expect bumper levels of interest. But will those rural communities welcome a great influx of visitors who may well bring the virus with them?

“City centre London hotels, conversely, often cater for wealthy, international guests. That trade is unlikely to return any time soon, especially when the theatres and many other attractions may not be fully open, while fine dining restaurants may find it harder to re-open whilst delivering the attentive service that plays such a big part in the experience.

Sustained support

“The biggest obstacle for all hotels though is likely to be room cleaning. We’ll almost certainly see in-stay cleaning greatly reduced, with no nightly turndowns and fewer changes of towels, however post stay cleaning will present the greatest challenge. For hotels to clean to a sufficiently high standard – with a deep clean no doubt required given the virulence of COVID-19 – will prove both extremely costly and time consuming, with a 24-hour gap between stays likely to be needed.

“The feasibility of opening for hotels then and subsequently breaking even – let alone turning a profit – is very unlikely as things stand. The extension of the furlough scheme though, should enable hospitality operators to stay afloat for longer, providing the necessary breathing space for businesses to bide their time until they can establish a viable way of operating.

“Despite the Government’s tentative July plans, our industry is likely to need sustained support for a long time if it’s going to be given the opportunity to recover. As a formerly thriving sector and one of the largest employers in the UK, we certainly hope that the Government will maintain its support not just until October but beyond.”