No great escape for the night time economy
Others will wait until the engine warning light comes on because this is a sure sign that something isn’t right.
Others still will be happy to drive along with the engine on fire, black smoke billowing from every hole and window until stopped by the authorities. They’ll throw up their hands and question why they’ve been stopped. If the car’s still going then there’s no problem, is there?
Anyone with an interest in the UK’s hospitality industry must feel like they’re in the third scenario right now. Red lights are flashing everywhere and it couldn’t be any more of an emergency than if they were on fire themselves.
The latest alarming evidence came with the publication of a new survey from the Night Time Industries Association (NTIA) – the representative body for this section of the hospitality sector.
400 respondents took part and even in this year of shocking news and statistics, the findings are stunning.
The stark headline is that three quarters of pubs and clubs operating in tiers 2 and 3 expect to be permanently out of business by Christmas.
75.6% said that without support, they would not be reopening again.
Just under this total said they’d been forced to make staff redundancies this year while nearly two thirds said they’d made over 40% of their workforces redundant already.
Michael Kill, Chief Executive of NTIA, sounds like a man with no more figs to give.
“This announcement by the government has led us to believe that they are intentionally aiming to collapse our sector.
“Every town and city across the UK stands to lose valued and much loved venues. This will be another stab in the heart of our town and city centres.
“We stand to lose the cultural institutions and amazing workforce of professionals that the UK are renowned for globally. Our clubs, bars, venues, security, freelancers, staff, managers, DJ’s and many more will lose their livelihoods and continue to suffer financial hardship without government intervention.
“I make a direct appeal to the Prime MInister – Mr Johnson, what are you doing to save the lives and livelihoods of the many businesses and workers within the night time economy, businesses that have been closed since March and are continuing to suffer?
“They have staff and freelancers that will lose their jobs irrespective of furlough because the businesses won’t survive.
“What do you say to that Prime Minister, I hope you’re sleeping well at night because thousands within our sector are struggling to sleep, in fear of their future.”
The survey also found that just under three in four respondents were commercial tenants and 77.6% said they were more than two quarters in rent arrears too.
The government has been commendably agile in devising and implementing support schemes this year including the Coronavirus Job Retention Scheme (CJRS), Bounce Back Loans (BBL) and several other initiatives such as rent holidays and VAT suspensions.
But there hasn’t been and can be no economic “magic bullet” solution that will save every business and every job.
The Chancellor himself and others have been unusually forthright about this and recognise the gravity of the situation but it’s still hard not to feel sympathy for everyone in the hospitality sector, not just the night time bars, clubs, pubs and venues, but restaurants, cafes, bistros, micropubs and coffee shops too.
Sympathy won’t pay the bills however and given the forbearance of creditors is not infinite, the window for finding help is perilously close to slamming shut.
Back when there were only four TV channels, the same films would be shown at Christmas every year – the only thing that changed is which of the channels they’d be on.
The one that got most attention is the excellent but definitely unchristmassy “The Great Escape”.
It’s a tremendous misnomer because for a film called and about a large number of prisoners escaping from a POW camp, the actual number who do ultimately get away, three, is incredibly small. Most just don’t make it.
This is the scenario facing the majority of not just night time venues but most of the hospitality sector. That the majority might not make it.
Once this unpalatable but realistic scenario is recognised then the next step is easier – doing something about it.
As well as the various Covid-19 support measures, the government has suspended some insolvency rules and introduced others to make administration not just a viable but an attractive option for many businesses that’s only other path would have been liquidation.
Get in touch with us today and we can let you know what options are available for businesses that are themselves or in a sector that is in trouble.
We can quickly arrange a free virtual consultation where we can better understand the unique challenges you’re facing; what strengths and assets you’ve got to rely on; what the biggest threats are and what you can do to protect, rescue, restructure and relaunch.
We’ve got some tremendous tools to help businesses survive but we can only do so if they let us know they need them. Because despite the odds, for some a great escape can be achieved in the end.