‘Economic Devastation’ Warning for Welsh Hospitality Sector


'Economic Devastation' Warning for Welsh Hospitality Sector

Written by:

David Chapman
Executive Director
UK Hospitality Cymru


UKHospitality in Wales is Calling for the Welsh Government to further support our vital local businesses and our staff with an additional winter investment package to help avoid families and communities across Wales from facing economic devastation.

We welcome yesterday’s announcement of a ring fenced element of around £20m for our industry within the new Economic Resilience Fund (ERF). That will, of course, be immediately of benefit to some businesses. But with so much to lose, I’m afraid we will need more.

We are the third largest private sector employer. Our industry is bigger than the pharmaceutical, automobile and aerospace industries combined. It employs directly around 140,000 people in Wales – and indirectly around 40,000 more – and our members here estimate that their payroll could drop by 40,000 people in a few short months.

That’s why we are asking, in addition to ERF, for a special new sectoral “bridging fund” to get us through the commercial desert of November to March.

It’s desperately needed and would be a sound investment.  The reality in this injured industry is that we have pubs, cafes and restaurants that will consider closing as early as this weekend. Some, like the night time economy and wedding venues, have barely opened or not opened in a year.

And, waiting in the wings, we have much larger scale individual commercial casualties; hotels and other significant businesses that are limping along currently on 30-50 per cent trading and facing worse. They are looking at the barren winter months with fear, frustration and trepidation as they face making more and more of their trained, trusted and valued staff redundant.

Just imagine the impact and the public reaction to news of several hundred manufacturing factories in communities across Wales announcing simultaneously today that they fear closure or at least swingeing cut backs on those they employ.

That’s what we are facing with every one of Wales’ hotels, holiday parks, wedding venues and other major events and conference venues. These employ between 50 and 1,000 people in each site – often many more than most small factories.

Up until March, they have been contributing millions of pounds in Business Rates, VAT, PAYE, employer contributions and other taxation that pays for local government and other essential public services.

They contribute millions of pounds into other local businesses, such as butchers, fishmongers, greengrocers, bakers and construction companies. They are centrepoints for social interaction, charitable works and community activity.

They are generational contributors – some for five and six generations- and, given normal commercial trading conditions, can be relied upon to be there year after year and to make your family moments unforgettable as they and their staff orchestrate great experiences day after day.

But these aren’t normal trading conditions. They are New Normal trading conditions and our Hospitality businesses have been shut down for months and then had strict restrictions on re-opening. They have professionally handled two metre legally enforced social distancing and scores of other guidelines that mean trading at sub-viable levels.

Any new support would help protect so many more of these vital jobs and businesses. Within a holistic package of Business Rates holidays, continued 5 per cent VAT and other employment measures, we can help keep hospitality alive, your family and friends safe and employed and help hold communities across Wales together.

If we can get through this terrible time with the help of Government and the public, we can start to pay the £38 billion-plus the UK industry pays to the Exchequer. We will be placed to reinvent, innovate and reconnect with our customers and once again stage the longed-for weddings, special events and good times with friends as the new spring season arrives and, hopefully, the pandemic subsides.

Now that would be something to celebrate…