New strategy needed to help bolster hospitality and tourism sector

New research by the Federation of Small Businesses (FSB) has highlighted the devastating impact of the pandemic on the UK’s tourism and hospitality sector and its supply chain, outlining what small firms, which make up the majority of the sector, need to get back on their feet. 

With businesses said to be reeling after the government’s final stage of reopening in England was set back last week, leaving some businesses closed and without income for 15 months, the new report A Menu for Recovery has called on the government to develop a new hospitality and tourism strategy to focus on the underrepresented small businesses in the sector and help lay out future support plans.

"With mass closures and restricted openings over the last 15 months, COVID-19 lockdowns have shown just how important our pubs, restaurants, hotels and thousands of businesses in the supply chain are to both the economy and our communities," said Mike Cherry, FSB national chair.

“The ever-rising cost of doing business was already weighing heavy on these firms and the pandemic has only exacerbated it. This week’s decision to postpone relaxation will have dashed the hopes of thousands of small businesses that have been unable to operate at full capacity since the pandemic started. With a crucial summer season ahead, we need to make sure the beleaguered sector gets urgent help to ensure its survival."

The report asks the government to help small firms in the sector employ and retain skilled staff, which many businesses are struggling to do against a backdrop of Brexit and the pandemic. Ways to do this include cutting Employer’s National Insurance Contributions, the FSB said.

FSB also wants to see more young people encouraged into the sector by ensuring T Levels work for small businesses by extending incentive payments for employers in England to deliver industry placements beyond July 2022.

The business group also called for urgent action to extend the hospitality VAT rate reduction to 5 per cent until March 2022, and 100 per cent business rates relief throughout the full financial year for businesses in England.

Moreover, in addition to asking for the pavement licensing process to be made easier for businesses that sell food and drink, the FSB also called on the government to back restaurants, cafes and bars by reducing alcohol duty on beers, ciders and wines.

"If businesses want to build on opportunities as they adapt to new ways of working, like expanding their outdoor dining or continuing to operate as a takeaway, they shouldn’t have to jump through hoops to do so," Mr Cherry said. 

According to FSB's research, levels of debt among businesses is rocketing, with three-quarters (77 per cent) of small firms in the sector taking on debt post-COVID. 

“The hospitality and tourism sector has been hit hard by the pandemic, with businesses across the UK suffering unprecedented and unpredictable disruption. Government now has the opportunity to rethink the importance of these businesses and how they are supported,” Mr Cherry concluded.