Nearly two-thirds of hotel businesses feel abandoned by the government | Economic news

Nearly two-thirds of hotel businesses say they feel let down by the government, according to a survey.

Delivery franchise company Peckwater Brands commissioned a survey asking 201 senior decision makers in the hospitality industry for a picture of the industry.

Hospitality has been among the hardest hit by restrictions linked to the coronavirus pandemic and, despite support such as the government’s furlough scheme, 64% said they felt disappointed.

When National Insurance was increased for workers in April, it was also increased for employers – their contributions fell from 13.8% to 15.05%.

Some 69% of respondents said the increase was a mistake.

Also in April, VAT for industry returned to 20%, after being cut to 5% during the pandemic and increased to 12.5% ​​in October as restrictions eased.

Four out of five respondents said this increase should have been delayed for at least 12 months.

The sector accounts for around 5% of UK economic output and in February lobby group UK Hospitality said the pandemic had resulted in nearly £115bn in lost sales since March 2020.

It meant a £140billion-a-year industry was down 43% from what it would normally expect, with losses equivalent to 45 weeks of sales over a period of nearly two years, have they added.

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More than 80% of respondents said the government should take immediate action to strengthen the sector.

Two-fifths want more financial support programs, while 36% want a suspension of professional rates for companies in difficulty.

Just over a third said the government should subsidize energy bills for hotel businesses, 34% want a program similar to Eat out to helpand 23% want the government to subsidize alcohol to increase consumer spending.

Sam Martin, chief executive of Peckwater Brands, said: “The government must prioritize the development and communication of a realistic strategy to help sites get back on their feet.

“Admittedly, such a plan will take time to implement, so in the meantime, hospitality businesses need to consider alternative options to ensure they can stay afloat.

“Reassessing supply chains to find cheaper alternatives, for example, or exploring the possibility of virtual brands could be a step in the right direction. Indeed, such avenues could help organizations increase their revenues while waiting to know the government’s long-term strategy. .

“Clearly, the government needs to take positive steps to support the sector.

“But optimistically, steps can be taken by the companies themselves to increase their revenues and stabilize their precarious position.

“And provided they remain open-minded and flexible, I remain cautiously optimistic for the future of the organization. »

A government spokesperson told Sky News: ‘We have supported the hospitality sector throughout the pandemic with a £400billion package of economy-wide support which has saved millions of lives. jobs.

“And at the Spring Statement, we went a step further by announcing a £1,000 increase in Employment Benefit which will cut taxes for hundreds of thousands of businesses.

“Eligible high street businesses also get 50% off business rate bills and benefit from a business rate multiplier freeze, curbing bill increases and worth £4.6bn at over the next five years.

“We have always been clear that the reduction in the VAT rate was a temporary measure and it is true that our support reflects the fact that the economy has reopened. »

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