Industry leaders say hospitality already suffering from festive cancellations following introduction of Omicron measures.
In SalmonBusiness’s market report on Friday last week, we detailed an explosive increase in prices that, according to one informant at least, should be insulated from any fluctuations in the hospitality sector:
“It is retail and fresh [markets] that pull this. Evening consumption in restaurants is not about salmon, neither in Norway nor abroad. There is moderate harvesting in Norway and to some extent also in Chile, to the extent that we can call it a global market.”
Nevertheless, hospitality industry leaders said tougher restrictions had already caused irreparable damage to trade, especially in city centres.
While UK hospitality venues have not yet been forced to reimpose measures such as social distancing or mandatory mask-wearing, on Tuesday, the trade body UK Hospitality forecast that takings for the sector will be down by as much as 40 per cent for December, after figures from last week revealed early signs that customers were staying away.
Pubs and restaurants predict that Christmas cancellations made following the introduction of measures to limit the spread of the Omicron variant of Covid-19 in England will cut their festive takings by 40 per cent.
Data from the trade body for Monday to Sunday of last week showed a 13 per cent drop in trade and a 15 per cent increase in cancellations, compared with pre-pandemic levels.
In central London, which is particularly affected by office workers following government guidance to stay at home, takings were down 40 per cent, while there was a 25 per cent surge in Christmas bookings being cancelled.
The figures cover a week that followed the identification of the Omicron variant and included the announcement of tougher Covid-19 restrictions, known as “plan B”.
“The damage has been done,” said Phil Urban, the chief executive of Mitchells & Butlers, which owns 1,700 pubs and restaurants, including the O’Neill’s and Harvester chains.
According to the Guardian, Urban said customers had begun calling off events last week after the government announced measures including guidance to work from home if possible.
“We immediately saw cancellations. Anybody who was at all nervous, or any company that was planning a do was likely to cancel,” Urban claimed.
“We saw the impact on Friday and Saturday but we’ll really start to see the damage this week, particularly in city centres where historically we’d have lots of corporate events. That’s gone now and there’s nothing anyone can do to put it back.”
Selling shares in major hospitality companies
Investors responded to the gloom around the sector by selling shares in major hospitality companies on Monday.
Premier Inn’s owner, Whitbread, and InterContinental Hotels Group were among the biggest fallers on the FTSE 100, losing 3.5 per cent and 3.3 per cent respectively. On the FTSE 250, JD Wetherspoon shed 5.4 per cent, while the Wagamama owner, Restaurant Group, declined by 3.9 per cent.
The association’s chief executive, Michael Kill, said losing festive takings would be “a threat to the very survival of thousands of businesses and jobs.
“It is vital that the government and in particular the chancellor recognise the impact of the government’s public health messaging and swiftly implement proportionate financial support to ensure businesses and jobs are protected during this extremely challenging period.