Businesses in the hospitality sector are warning that continued uncertainty over potential pandemic restrictions looks set to make December a trading disaster.

With scientists warning that the rate of transmission of the Omicron strain of the Covid virus are very high, concern remains over whether events over the New Year period will be able to proceed as planned. At a cabinet meeting on Tuesday, the government decided against introducing further restrictions but did not rule them out altogether, with the Prime Minister adding that they will “have to reserve the possibility of taking further action to protect the public”.

Consumer confidence has been dented this month, and hospitality sales last weekend – the last before Christmas and usually a bumper time for hospitality – plummeting by 40%. Figures from industry body UKHospitality, show that December is set to be a disaster for a sector which had much riding on this key period and it says hopes for a better 2022 already lie in tatters. Over half (54%) of venues were down more than 40% in revenue last weekend, with one in five businesses reporting a sales drop of more than 60%.

On top of these trading figures, 88% of operators say they feel negative about the potential of New Year’s Eve trading and four in five operators have already experienced cancellations for bookings in what was already set to be a quiet Q1 next year.

A separate survey, for the Tourism Alliance, showed that a third of pubs, bars and restaurants have no cash reserves and 10% of pubs and 14% of restaurants are therefore very likely to fail, with consequent job losses. Without any form of Government support a further 40% are at risk of failure. Accommodation businesses are only slightly more resilient with 22% reporting no cash reserves – 47% with less than two months’ worth – with 26% at risk of failure in the next year without further support.

Kate Nicholls, chief executive of UKHospitality, said: “Hospitality operators desperately want to keep their doors open and trade their way to recovery, particularly during the Christmas period, which is not only key for balance sheets but for the communities and people our businesses serve. However, these catastrophic figures clearly show that trading levels are now so low that without Government support many businesses will not survive into the New Year and jobs will be lost. Cancellations have annihilated cash reserves.

“The industry urgently needs grants for short-term business survival and an extension to business rates relief and the lower VAT rate to secure longer term survival and planning. It is also crucial that the Government lets the industry know as soon as possible if measures are to be imposed and what they might be, to allow for as much damage limitation as possible.”

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