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Up to 460,000 jobs at risk if government doesn't extend hospitality support to include suppliers

01 July 2020 by

According to a UKHospitality survey, the lockdown impact on suppliers could mean up to 460,000 jobs at risk if the government does not extend hospitality support to include suppliers.

The survey found that 69% of respondents had 75% or more of their revenue purely within hospitality, with an average decline in trade of 78% and one in four suppliers not trading at all.

Suppliers highlighted the importance of their services to an operator's ability to reopen smoothly but concerningly, current hardships could mean the prospect of mass redundancies and business closures if government support is not extended through early trading.

Suppliers have had a patchy success rate in accessing support to date and are concerned should government support be withdrawn while operators are either still closed or open but trading at historically low levels. In such circumstances, one in five suppliers will expect to close while three in four will have to make redundancies. With an average redundancy rate of 40%, that equates to 460,000 job losses across the hospitality supplier sector.

Suppliers forecast six months of support should allow them to avoid redundancies, with a further month helping them remove the risk of business closures.

UKHospitality chief executive Kate Nicholls, said: "The supplier network is integral to the hospitality ecosystem. These businesses will provide critical support to operators and will be an essential part of a successful restart. Suppliers will also be the last to be paid. It is vital therefore that government provides immediate support through to the point where our world class hospitality venues are commercially viable. Our ask therefore is a simple one: parity with operators so that any ongoing measures in support of hospitality include the wider ecosystem.

"We have been encouraged to see a shift in guidance in some areas, for example on discretionary grants, to recognise suppliers are a significant part of the hospitality sector. However, government needs to adopt this position more widely to ensure suppliers benefit from measures targeted at hospitality businesses.

"After months of little to no revenue and with a requirement to invest in order to play their part in the restart, the supply chain is at a critical point. Support now and they can play their part in ensuring the UK's world class hospitality sector bounces back sharply. Without support, many will go to the wall, operators will disappoint their customers and a potential 460,000 team members will find themselves unemployed."

UKHospitality is asking suppliers to contact their MP and raise awareness of the need for further government support. A template letter and instructions can be found on the UKHospitality website here.

Photo: Shutterstock

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