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News & Press: General

UKH calls for far-reaching Government action on rent to protect millions of hospitality jobs

17 May 2020   (0 Comments)
Posted by: Pernille Thomsen
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UKHospitality has written to the Government urging it to intervene and broker a solution that solves the current stalemate on rent in the sector. Without this, the trade associations warns, there will be widescale job losses and business failures in the coming months.

In a letter to Business Secretary, Alok Sharma MP, UKHospitality has highlighted that, despite an announced moratorium on enforcement action, hospitality businesses are still being aggressively pursued by a minority of landlords. These businesses, the vast majority of which have virtually no income and are closed during lockdown, are still being threatened with winding-up petitions, having deposit funds taken and being served with County Court Judgements.

In circumstances where landlords have offered rent deferrals, this will just lead to an accrual of debt which will be incredibly hard to pay back as hospitality businesses will be trading below normal levels for the foreseeable future.

UKHospitality warns that although the Government has urged tenants and landlords to work together to find solutions, the commercial property market is effectively broken. In a recent survey of sector business leaders from CGA and Fourth, rent payments and securing landlord agreements were the top priority for 67% of respondents.

The letter calls on the Government to urgently step in to broker a solution at a high-level Ministerial summit, based on the following principles:

  • All relevant stakeholders must be involved
  • Government intervention – both financially and legislatively – is necessary
  • The assumption that the vast majority of hospitality and leisure businesses will not be able to pay rent for the remainder of 2020
  • There must be a ‘sharing of the pain’ between tenants, landlords, investors and Government
  • Action must be taken swiftly, with a resolution before the next quarterly rent date at the end of June.

UKHospitality Chief Executive Kate Nicholls said: “In June, sector businesses are due to pay nearly £800 million in rent, having been forcibly closed and generated no income for over three months. We appreciate that landlords have their own financial pressures and the majority of landlords have been happy to work with tenants to find solutions, but a damaging minority continue to put pressure on beleaguered hospitality businesses at the worst time.

“Having discussed this issue with a vast number of industry bodies, it’s clear we need a National Time Out on rent as the vast majority of hospitality and leisure businesses will simply not be able to pay for the rest of the year. The Government must step in quickly to help hospitality businesses, landlords and investors find a mutually beneficial solution. We are ready and eager to sit down with all stakeholders to thrash out an equitable solution, with the Government acting as honest broker.

“If the commercial rental market collapses, it will be to the long-term detriment of the whole economy and lead to millions of hospitality workers losing their jobs and swathes of businesses permanently closing their doors.”

ENDS

Notes on UKHospitality

  • UKHospitality is the trade body representing the UK’s hospitality sector, established following a merger approved in February 2018 between the Association of Licensed Multiple Retailers (ALMR) and the British Hospitality Association (BHA)
  • UKHospitality is the authoritative voice for over 700 companies, operating around 65,000 venues in a sector that employs 3.2 million people
  • The body speaks on behalf of a wide range of leisure and ‘out-of-home’ businesses, from FTSE 100 enterprises to niche groups and independent single-site operators
  • For the first time, the sector has a single voice bringing together businesses from all aspects of hospitality; coffee shops, hotels, serviced apartments, pubs, restaurants, leisure parks, nightclubs, contract caterers, entertainment, stadia and visitor attractions
  • Engaging with government, the media and the public, UKHospitality works to develop a robust case on how to unlock the industry’s full potential as the biggest engine for growth in the economy and ensure that the industry’s needs are effectively represented
  • The sector creates £130bn in economic activity and generates £39bn of tax for the Exchequer, funding vital services
  • Hospitality represents 10% of UK employment, 6% of businesses and 5% of GDP
  • Hospitality is the 3rd largest private sector employer in the UK; double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined

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