Nightclubs, pubs, restaurants and many more wonder what sort of Christmas they’ll get

The Prime Minister has deployed various “Plan B” measures to help stem the flow of the Omicron variant of the Covid-19 virus with cases already doubling every few days. 

This includes bringing advice in England into line with the other devolved nations so staff should work from home where possible and announcing mandatory vaccine passports for nightclubs and other venues hosting large crowds.

Even before these announcements, many companies in the hospitality, leisure, entertainment and travel sectors are reporting many cancellations of bookings. 

UKHospitality estimates that pub and restaurant takings could be down in December by as much as 40% while the Night Time Industries Association estimated that their Scottish and Welsh members had seen a drop in trade of up to 30% where restrictions were already in place and could see a similar effect happen in England.

Chief Executive Michael Kill said all his members were facing 12 days of “Christmas misery” by allowing businesses to trade while telling consumers to reduce social contact at the same time. 

He said: “It’s vital that the government recognises the impact of its public health messaging and swiftly implements proportionate financial support.”

Clive Watson, chairman of the City Pub Group, with 50 establishments all over the UK, confirms that “about 10 days ago, office parties started to get cancelled, particularly those office parties which were being funded by companies so typically for 40 to 50 people.

“Not only are you not making money now but you’re not building out the cash to help you in the very lean periods in January and February. It’s almost like turning off the life support machine.

“Energy prices have gone through the roof, labour prices have also gone up significantly and inflation is running at 5%. 

“This means we could easily see the price of beer increase by up to 25p or more in the next year.  We’re not against restrictions and if they help slow down the progress of this variant, fine.

“But please give us an enhanced state aid to help tide us over to those leaner months otherwise a lot of businesses in our sector will just run out of cash.”

Supercharge your business this Christmas with these super seven strategies

The Society of Independent Theatres estimates that many regional and smaller theatres are facing a peak Christmas season with bookings down as much as 50% in some cases at the time of year when they usually generate a full third of their income. 

Although several high profile productions due to be staged at the National Theatre, the Royal Shakespeare Company and the Donmar Warehouse have cancelled performances already due to a combination of cast members becoming ill which will only depress demand further. 

The Premier League is also seeing matches cancelled for the first time this season due to Covid-19 infections with the squads of Tottenham Hotspur and Manchester United. 

The weekly survey of compulsory player testing showed that the league found 42 players had tested positive last week – the highest weekly total ever recorded with the previous high of 40 occurring in January 2021. 

Ruby McGregor-Smith, president of the British Chambers of Commerce, said: “The government must once again stand shoulder to shoulder with business and provide a package of support to ensure that we get through a challenging winter without serious damage to our economic recovery. 

Matthew Fell, chief policy director at the CBI said the fresh restrictions were a “big setback for businesses” especially in the hospitality, retail and transport sectors, at a key time for sales. 

He said: “It will be vital that the impact of these restrictions is closely monitored, and that the government is ready with targeted support as required.

“With plan B coming in, the net effect is that demand in some sectors will be suppressed and cash flow will clearly be an issue for some firms in the next few weeks.”

Economic analysts are predicting that the adoption of plan B would reduce GDP overall by about 0.2% to 0.5%.

Economist Paul Dales said the effects would: “feel fairly small if people don’t buy train tickets, go to work or the pub near the office.

“It’s very different to shutting all retailers and hospitality.”

But he acknowledged that the launch of more stringent requirements such as closing non-essential retail, pubs, restaurants and even schools would cause more severe damage estimated at between 3% and 5% which would be a “worst-case scenario”. 

When the first lockdowns were announced in Q2 2020 there was a collapse of almost 20% in GDP which formed part of the worst economic slump the UK had ever experienced.

Dales acknowledged that any further moves to tighten controls would trigger an immediate contraction in the economy and lead to immediate demands to reinstate emergency support measures such as business grants, loans, tax cuts or even a reinstatement of the furlough scheme. 

Another unpromising data point also published this week showed that up to a third (33%) of small businesses were planning to make redundancies in the next few months rising to four in ten in London. 

This is in addition to 49% many saying they will be forced to raise prices over the next six months too citing the problems with supply chains as the main reason. Only 38% cited increased staffing costs as the main driver in price increases. 

442 respondents said they were still struggling with repaying debts accrued during the pandemic including bounce back loans as well as grappling with supply chain disruption, keystaff shortages and increasing energy costs.

This year could still end on a high – but only if directors act while they can

When somebody refers to Last Christmas it used to mean they meant the lovely song or even the feel good film.  

Now, especially If you’re in the hospitality or entertainment industries it’s more likely to be a warning or a threat.

Even if the cases don’t rise to the amounts feared by the authorities, for many pubs and restaurants looking at empty spaces where full parties should be, the damage has already been done. 

You don’t have to be an economics expert to understand that Christmas is a pivotal period for many companies and that without the ability to build up reserves and savings, even if additional support measures are forthcoming, it might already be too late for them to recover or survive. 

While all of this is playing out, any business owner or director that is worried about how they will see through the next few months shouldn’t spend any more time worrying and find out what they can do instead. 

Our free initial consultation is available for them whenever they want to take advantage of it. 

Once they outline the particulars of their situation to one of our experienced, expert advisors, they can then let them know what options they’ve got whether they would prefer to rescue and restructure their business or not. 

Some otherwise viable companies might owe too much to continue so being able to close down efficiently even with debts (this will link to the closing company down blog) might be the best way to go – especially as they could then look forward to beginning again without this burden weighing them down and holding them back.

But without taking that initial step and getting in touch this could just be another worry to add to an already uncertain Christmas.