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More than three-quarters of hospitality businesses at risk of insolvency as sector left in ‘truly desperate position'

04 August 2020 by

More than three-quarters of hospitality businesses in the UK are at risk of insolvency within the next year, according to UKHospitality.

One in five businesses consider themselves to be "at significant risk" or are anticipating insolvency within the next 12 months, while more than half believe it is a "slight risk", a survey by the trade body and CGA has found.

Fewer than a quarter of hospitality businesses felt they were at no risk.

Commenting on the figures, UKHospitality chief executive Kate Nicholls said: "These new figures underline the scale of the impact of Covid-19 on our sector and paint a truly stark picture of its immediate future.

"Over three-quarters of businesses in a sector which, pre-Covid, employed more than three million people, have some risk of insolvency within a year. Worryingly, over 20% are looking at a serious risk of insolvency or are now expecting it to happen. This is a truly desperate position to be in.

"The future of this sector, which provides jobs in every region of the country and is central to our social lives, has never looked shakier.

"The support the government has provided has been crucial in ensuring that many businesses have survived the initial shock of lockdown and stimulated a return of some demand. Without further support, however, we are going to see more and more venues going out of business and people continue to lose jobs.

"This means we need to see an extension of the business rates holiday and VAT cut, employment support for those businesses unable to open and financial support on rent. Otherwise, we are going to see businesses fail and jobs lost just as the economy begins to reopen."

Image: Shutterstock

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