Chancellor hands £1bn support package to hospitality and leisure sector

By Linsey McNeill
21/12/2021
Home » Chancellor hands £1bn support package to hospitality and leisure sector

Chancellor Rishi Sunak has announced a £1bn package for the hospitality and leisure sector, with grants of up to £6,000 for each premise.

However, it’s not clear if travel companies will be eligible for the grants. 

In a statement, the Chancellor said: “Recognising that the rise of the Omicron variant means some businesses are likely to struggle over the coming weeks, the Government is providing one-off grants of up to £6,000 per premises for businesses in the hospitality and leisure sectors in England.

“At what is often their most profitable time of year, many pubs and restaurants have seen cancellations and reduced footfall as people have responded to the rise in cases ahead of Christmas, with Hospitality UK reporting that many businesses have lost 40-60% of their December trade, often their most profitable month.”

Around 200,000 businesses will be eligible for business grants which will be administered by local authorities and will be available in the coming weeks. In addition to the one-off grants of up to £6000 for each premise, a further £100m will be given to local authorities to support other businesses.

“Given the uncertain situation faced by businesses, the government has chosen to provide generous grants, which are equivalent to the monthly cash grants provided to hospitality businesses when they were fully closed earlier this year, despite businesses now being still able to trade,” added the Chancellor.

“The effectiveness of government policies to support the economy through the pandemic and the success of businesses in learning to adapt means the economy is in a different place now than it was at the start of the crisis.”

UKHospitality CEO Kate Nicholls said: “This is a generous package building on existing hospitality support measures to provide an immediate emergency cash injection for those businesses who, through no fault of their own, have seen their most valuable trading period annihilated. 

“It will help to secure jobs and business viability in the short term, particularly among small businesses in the sector, and we particularly welcome the boost to funds for the supply chain and event and business catering companies so badly affected by the reintroduction of work from home guidelines. 

“It is a generous top up emergency fund in addition to previous support and with a commitment from Ministers to prioritise hospitality and its supply chain in allocation of funds. 

“There is now a real urgency in getting this funding to businesses so we urge local authorities to prioritise distribution of funds to make sure jobs and businesses are preserved through this difficult period.”

The rent moratorium for hospitality premises remains in place and commercial landlords have been asked to ‘show patience’ with struggling hospitality tenants.

A further £30 million of funding will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support during the winter.

In response to the Chancellor’s funding announcement, ABTA’s Director of Public Affairs Luke Petherbridge said: “The Chancellor’s statement today once again ignores the direct impact of Government policy decisions on businesses reliant on international travel.

“Travel agents, tour operators and travel management companies will rightly be asking why they haven’t been given the same treatment as other businesses that are suffering at this time.

“Average annual revenue across the travel industry is down by nearly 80% on pre-crisis levels even before Omicron emerged, and the re-introduction of enhanced testing – both pre and post arrival – have added significant costs and notably dampened consumer demand. As the sector approaches what should be the peak sales period for booking holidays for summer 2022, businesses are instead facing another round of heart-breaking and demoralising cancellations, with no indication that the government is listening to the challenges they are facing.

“While extra funding has been allocated to the Additional Restrictions Grants scheme, this will not go far enough to support a sector that has endured 21 months of restrictions. What’s more, travel businesses will have to compete with companies in other industry sectors to get some of this cash. It simply isn’t good enough for the government to continue to ignore an industry that, prior to COVID-19, supported over 500,000 jobs and generated more than £37bn for the UK economy.

“We urgently need Ministers to engage with us to find solutions to keep businesses afloat and save jobs. In particular, we need to see:

  • The immediate lifting of unnecessary travel restrictions
  • Tailored winter resilience grants for the travel sector, similar to those announced today for hospitality
  • Help for businesses facing loan repayments at a time when they have no income
  • The extension of rates relief for all travel businesses in financial year 2022-23

“The Government must also urgently consider the case for furlough and other income support, especially if travel restrictions are going to be maintained for any significant period.”

Joss Croft, CEO, UKinbound said: “The Chancellor’s budget will undoubtedly help domestic tourism businesses that are facing unprecedented challenges due to the Omicron restrictions which is obviously good news. However, it is astounding that hospitality businesses, which can trade, will receive sector specific support, but the UK’s tourism supply chain, such as inbound UK tour and coach operators, are being left to wither and die. 

“Just yesterday VisitBritain announced that the UK’s combined inbound tourism loss in spending for 2020 & 2021 is £47bn, and today’s announcement and lack of meaningful support rubs further salt into the wounds of the UK’s inbound tourism industry.”

 

 

 

 

 

 

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