Hotels located in regions deemed Tier Three in the UK will not be able to access the support available to other parts of the hospitality sector.
With hotels still able to legally open, but travel deterred, they are likely to fall through the cracks of the system.
Under the new job support scheme, from 1 November the government will support businesses in the UK that have to close as a result of local or national coronavirus restrictions by paying 67% of the wages of any employees who cannot work (up to a maximum of £2,100 a month).
According to a note released to clients by CMS: “Although most businesses can remain open in these regions for the time being, the prohibition on households mixing indoors may, particularly for many parts of the hospitality sector, mean that staying open is not a viable option. These businesses will not however be covered under the new Job Support Scheme if they close as they are not “legally” required to do so.”
Government recommendations state that people can still travel within high alert level areas to hotels and other guest accommodation, “but you should only do this with people in your household or support bubble”.
Kate Nicholls, CEO, UKHospitality, confirmed to us that hotels were able to remain open and were not required to close because, as in the lockdown earlier this year, they could choose to house key workers, business travellers, professional sports team and journalists.
Unless F&B can operate as only offering alcohol with a main mean, staff can be furloughed, but would not receive the full grant.
Robin Sheppard, president, Bespoke Hotels, told us: “Fears for tiers? I have just been playing a few songs from what at the time seemed like a polemical album. ‘Songs from the big Chair’There is a chorus which reads as “We are paid by those who learn by our mistakes” on the track ‘the working hour’ which seems very apposite to me when applied to our present omni shambles government. The threat of a tier change is enough to send forward bookings into meltdown, and the policy of leaking likely tier changes before discussions have actually taken place with regional leaders is patently absurd.
“Meanwhile back in Brexit la la land we are supposed to prepare for changes from January next year; which is a bit rich when we only have ‘expect the worst and double it’ to gauge our market expectations on.
“We all want to consign 2020 to the dustbin but sadly 2021 is going to be so bad that this current year will seem like a walk in the park.”
Ralph Hollister, travel & tourism analyst at GlobalData, said: “Total UK domestic trips are now set to drop by 64.1% this year from 122.2 million in 2019 to 43.8 million in 2020. The constantly changing restrictions and guidelines around domestic travel in the UK will add further uncertainty, deterring travellers from venturing outside of their local areas.
“Major cities in the UK have already felt severe repercussions from the pandemic as many domestic travellers have opted for trips in more rural areas, away from busy shopping streets with high footfall. The new three-tier system is likely to exacerbate this issue as the areas with the highest infections rates – and therefore placed under greater restrictions – contain major cities, most notably Liverpool.
“Like many major cities in the UK, a significant part of Liverpool’s economy relies on leisure, hospitality and tourism, especially from the domestic market. Therefore, the Liverpool city region being placed in Tier 3 will have a disastrous impact on the local economy. Bars and pubs are now shut and inter-household contact is forbidden, creating precious little demand for the tourism-related services in the city that prop up the economy.
“Families planning on a domestic trip this October half-term may be restricted by a series of coronavirus rules following the introduction of the government’s newly established three-tier system. Depending on the tier of the region in which the traveller resides in, rules on travel differ. Who they can travel with and where they can travel to change through the tiers. This select approach by the government is likely to cause confusion for many travellers and increase uncertainty, resulting in reduced demand. The upcoming months look bleak for the UK tourism industry and with the national infection rate continuing to surge, it appears there is no sign of let-up in the near future.”
Insight: The theme of the UK government at the minute is very much one of ‘but you can open so really, why do you need help?’, wilfully ignoring the complaints that customer confidence has been utterly shot as a result of repeated briefing that the hospitality sector is to blame for the second wave - inaccurately so.
But hotels can stay open so boo sucks to that. Because why wouldn’t you want to spend half term in the centre of a Tier Three region, unable to do anything but think about how great the hotel room is. And sure, there are some great hotel rooms out there, but it’s unlikely that enough people think so to reach breakeven for the average hotel. Despite the shouting over the past six months, government could still give a damn about the sector.
Speaking at last week’s AHC Reimagined, IHG CEO Keith Barr closed with a warning about the need for the sector to have a louder voice, telling attendees: “My concern is that governments don’t understand the importance of travel and hotels in terms of jobs. Governments have to support this industry, if they don’t get behind this you will see small businesses fall over and that’s not good for society.”
Join us in helping to push the call for a Minister for Hospitality in the UK government to remind those in power that hotels matter. Sign here: https://petition.parliament.uk/petitions/552201