A CALL has been made for targeted government support as thousands of hospitality businesses across Scotland continue to haemorrhage money and staff as a result of the coronavirus crisis.
While some businesses are managing to sustain around 90% of their pre-Covid turnover, others are facing ruin even if they are in the lowest levels where pandemic restrictions are less strict, according to people in the trade. Many of the worst affected are in city centres and in normal trading times provide a significant boost to the country’s economy.
Gavin Stevenson, whose Inverness venue Gellions promotes the trad music scene, said even level 1 was “horrific” for businesses like his.
He revealed that a survey of “wet-led” and late-night outlets in Inverness city centre last week showed the average decline in sales was 71%.
“The impact for us represents over £1m a year in lost income for just one venue yet I know businesses in level 2 that are trading at 90% of last year’s turnover because they are daytime, food-orientated hospitality businesses,” he said.
“If you are a business that is mostly food sales during the day then you will be able to continue trading within the restrictions without a significant impact but if your venue is reliant on standing room only seven nights a week then the impact is absolutely massive.”
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He said that because of the one-metre social-distancing rule and table service only, capacity at Gellions had been reduced by 75%.
“You don’t have to be a rocket scientist to figure out that if you can only fit in 25% of your usual custom that means around 25% of turnover, so even in level 0 during the summer we were limited to a maximum of 25 or 30% of last year’s takings.”
Stevenson said support should be targeted “far more specifically” at premises suffering the worst impact.
“We think that would be a fairer solution rather than a blanket approach that gives everyone the same amount when clearly the impact is so different.”
He added that if VAT figures were sent in with grant applications it would be relatively simple to target support according to need, no matter which level businesses were in.
“We are now starting to see real financial distress in quite big sub-sectors of the hospitality industry and we would urge the Government to engage in much more focused conversations with the trade bodies to try to see how that support can be targeted to those that really need it,” he said.
Without a thriving night-time economy, cities would become “substantially less attractive” to tourists, he warned.
“Before Covid we were a very viable, thriving business and had increased the number of staff and booked more Scottish trad music than any venue in Scotland,” said Stevenson. “We booked 648 gigs last year and we provide an enormous source of income for musicians across the Highlands and help to keep the culture alive. For us to go from being such a busy and thriving business to being in position where we lost £1m a year of turnover through absolutely no fault of our own is devastating.
“We understand the Government can’t be expected to replace all the income we have lost but, if it is going to legislate for us to close or be unable to trade viably, we at least need to have sufficient support to enable us to survive,” he said.
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A few tweaks to the tier system could also save jobs and businesses according to a study commissioned by trade bodies.
According to the Biggar Economics report last week, increasing opening hours by two and a half hours and resuming alcohol sales under “strictly controlled conditions” in areas graded at levels 1 to 3 could protect more than 32,000 jobs, increasing turnover for the hospitality sector from £419m to £1.1bn.
Stuart McPhee said he had closed his Aberdeen city centre bar and hotel this weekend as the area moved into level 3 because it wasn’t viable to remain open under the tightened restrictions, which means he cannot serve alcohol and has to close at 6pm instead of the level 2 closing time of 8pm.
“If we’re able to move into level 3 and still be able to serve alcohol that would be different even if it was just during the day,” he said.
He added that if the area went back into level 2 he would be able to serve a second sitting at the Siberia Bar and Hotel if venues were able to stay open inside until 10.30pm.
“That’s just bringing it in line with the outside rules so I don’t think that is too much of a stretch,” said McPhee. “We have capacity for 374 and generally average £35,000 per week in normal times but here and in the venues around me, capacity has been cut by a third although we still have the same fixed costs so it is very hard to balance the books.”
Donald Macleod MBE, CEO of Holdfast Entertainment Group, NTIA, said the new study laid bare the “perilous” state of the sector.
“It clearly outlines the gradual baby steps urgently needed taken by the Scottish Government to help secure this hugely important sector and protect the livelihoods of the tens of thousands of workers reliant upon it,” he said. “I hope they are listening and take it all on board.”
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A Scottish Government spokesperson said: “We fully understand the challenges facing the hospitality sector as we look to balance measures to suppress the virus and protect lives with keeping businesses open and trading viably. No-one wants these restrictions in place a moment longer than necessary to reduce the spread of the virus and prevent the NHS from being overwhelmed.
“Our business support now exceeds £2.3bn, including 100% rates relief for pubs and restaurants for the year, and we will shortly announce details of further funding targeted for tourism and hospitality. We believe the current restrictions for hospitality are the correct balance but we will continue to assess the restrictions to ensure they remain appropriate for the circumstances. We are committed to building on our constructive dialogue with the industry – including regular contact with key business organisations – and are listening carefully to their suggestions and concerns.”
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