September 8th 2020
The Economic Impact of Covid 19 on UK Hospitality
by Chris Hawksey Events industry, Covid 19, Hospitality trends, Survey
This article is part of Off to Work's 'The Future of Hospitality' series.
The economic impact of Covid 19 on UK hospitality has been swift and seismic. Overnight the coronavirus has caused historic venues and hotels to close down, transport to ground to a halt and an army of workers to go from serving cocktails to serving lessons for newly home-schooled children.
It can always be helpful to look back on recent recessions and learn what other hospitality experts did to prosper, but is this situation so unique it's time to completely rip up the old rule book?
As part of our survey of the leaders of the sector, we asked a series of questions surrounding their thoughts for the financial fallout of Covid-19 and their predictions for the future.
Unsurprisingly for arguably the sector most damaged by Covid-19, 71% of management enrolled at least three quarters of their staff in the government's Job Retention Scheme, which paid 80% of their wages up to a set amount.
With the industry shuttered overnight, these sorts of figures won't be of any surprise to most workers from any industry.
A surprising result for some, or simply a projection of the low expectations hospitality leaders have of those in government, but 54% of those surveyed believed No's 10 & 11 had supported the industry better than expected. The Job Retention Scheme has undoubtedly been key in ensuring huge swathes of staff remain employed, but also the relative success of the 'Eat Out to Help Out' scheme could have helped sway opinions.
What is perhaps surprising, is the disconnect between levels of engagement for those staff furloughed, and what management believe that level is. More than one in four staff feel completely disengaged with their company, more than twice what leadership expected.
Reintegration to the workforce is going to be one of the key areas of concern for the industry over the coming months, with retraining previously furloughed staff vital to future company cohesion. To see the full report on workforce views of hospitality, click here.
A sobering statistic, but fully reflective of the increasingly tricky trading conditions operators find themselves in - difficult decisions have to be made to protect the wider business. Around 73% of the sector are likely to consider to redundancies in the next six months.
Most likely not a surprise to many within the industry, but only 13% of hospitality leaders surveyed did not believe furlough was covering up a larger employment issue. With the Job Retention Scheme now beginning to be tapered off, only time will tell.
Management and staff are generally alligned (at time of survey) in their balancing of the economic and health risks of Covid 19 to be relatively even, although there is a slight tilt towards the economic risk. With the unique leadership insight by management, and the relatively young workforce (and therefore at the lowest risk of serious complications) it is perhaps no surprise that the economic consequences are seen as slightly more importnat.
To read the survey in full, including sections 'The Future of Hospitality', 'Health & Safety', 'Recruitment & Retention' and all the responses from our hospitality workforce click here.
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