Hospitality sector calls for help to survive winter

Hospitality businesses need more government support to survive the winter as they face a “tsunami of rising costs and low consumer confidence”, an industry body has said.

A survey for the Scottish Licensed Trade Association (SLTA) found that almost nine in 10 (87%) respondents said they will need government support to survive this winter.

More than half (55%) said they would reduce opening hours over the winter, including 10% who said they would close for the season.

Businesses highlighted rising energy costs as their biggest threat, with more than a quarter of venues (28%) saying they face their energy costs increasing by more than 500%.

More than 600 outlets responded to the survey, which the SLTA said is about 10% of Scotland’s pubs, bars, late-night premises and other licensed venues.

Colin Wilkinson, SLTA managing director, said: “For many outlets it won’t be economically viable to remain open and one in 10 of our respondents plan to close during the winter months and nearly one in two expect to reduce opening hours.

“Our sector is a crucial part of the tourism industry and reduced opening hours will have a knock-on impact for Scotland’s wider food and drink sector, and for employment within the sector.

“Our pubs and bars have worked very hard post-Covid and Brexit to showcase Scotland’s hospitality industry, but with a tsunami of rising costs and low consumer confidence, we urgently call on local and national governments to help us through the winter.

“We must protect the jobs that outlets provide directly and the associated jobs in the wholesaling, brewing/distilling and food-producing sectors.”

The survey found that 5% of outlets have not re-opened post-Covid, while 50% are trading at significantly lower levels than before the pandemic.

More than half (55%) of hospitality outlets said they are carrying significant Covid-related debt.

The research, carried out in September, also found that 40% of outlets are employing significantly less staff, while respondents also said that recruitment post-Brexit remains an issue.

Business Minister Ivan McKee said: “We recognise the enormous pressures facing businesses during the current crisis and have been engaging with them, directly and through key business organisations, to best understand their needs.

“We are establishing an industry leadership group with the sector and will continue to do everything within our resources and powers to help those most affected.

“The UK Government holds key policy levers and along with businesses we have repeatedly called on it to take urgent action.

“That includes expansion of shortage occupation lists, a VAT reduction on energy bills, an extension of the Coronavirus Business Interruption Loan Scheme and other loans.”

A UK Government spokesman said: “The UK Government’s Energy Bill Relief Scheme will reduce wholesale gas and electricity prices for all UK businesses, including pubs in Scotland, meaning they will pay wholesale energy costs below half of expected prices for this winter.

“Last week we also announced new measures supporting pubs in Scotland including cancelling the planned rise in corporation tax, reversing the 1.25 percentage point rise in national insurance contributions, which will save 920,000 businesses almost £10,000 on average next year, and freezing alcohol duty for another year.

“This comes on top of the Scottish Government receiving a record £41 billion per year settlement for the next three years.”