Amongst the great tragedy of the coronavirus pandemic, the UK’s hospitality sector has chosen to draw positives where they exist. The effects of an extended nationwide lockdown are being felt across all aspects of human life, but its impact is more poignant amongst service industry businesses as their hopes of opening back up before the end of the year become a distant thought. But with the need for the spirit of community now more than ever, the sector is fighting back to help support the rest of the country.
The hospitality sector alone contributes to almost 6% of the UK’S GDP each year and makes up the majority of the country’s 5.9 million small businesses. In extending the lockdown for a further 3 weeks and confirming that the 70,000 pubs, bars and restaurants will be last to reopen even once lockdown is lifted, raises great questions for the industry’s future in the years to come. With most employees within the sector out of work or already furloughed, the damage from the coronavirus crisis is set to hit hard.
The situation appears even more catastrophic with events across the country being cancelled or postponed till next year, leaving the 3.2million employees without a demand for their services and these lieus of social interaction without the necessary footfall to stay afloat even after the lockdown.
For these businesses, looking to what the rest of the world is experiencing doesn’t offer much reassurance. In China for example, where the virus first emerged, and lockdown lifted after 3 months, restaurants across the country have reopened. The situation is far from being back to normal, however, as they are still implementing the maximum safety precautions and have so far seen 0% footfall since reopening. A number of places have even closed permanently as a result – perhaps an alarming signal of what’s to come. Until then, the sector must work together to ensure they stay afloat and find ways to support the wider business community.
There are a number of businesses that have taken the lead in adapting and coming up with solutions that can lead the rebuild. A number of small restaurants and cafes have taken to helping local supermarkets by selling or donating their fresh produce – items like eggs or vegetables, since being shut down; others, like The White Rabbit in Oxford have donated all of their food to the Oxford Food Bank even though they have had to temporarily close.
This spirit of community is hugely important at this current time and what we will see is that the business owners who are innovating in the interim will be the ones who find it easier to bounce back and help those around them do the same. Keeping employers occupied in this way by still helping to prepare and deliver food during the pandemic, will in the long term positively affect their mental health helping the industry overcome the pandemic in a stronger way than others.
Meanwhile, a number of more creative, technology-driven solutions are also emerging within the sector, with businesses and communities alike collaborating to help one another. Through our work at Placed, the recruitment app for the hospitality industry, we have transformed our platform by launching a community support page where users share their current experiences during Covid-19 and access available jobs in other sectors, while restaurants and bars are closed.
Through our collaboration with the Food and Drink Federation, we continue to champion jobseekers on our platform, helping them to find alternative roles using the transferable skills they have learnt in the sector. Their skills can be valuable for a range of roles including food manufacturing, production, packaging and processing, amongst other key roles. This targeted innovation ensures that the engine of the sector keeps running through training and its workers keep thriving during challenging times.
Unfortunately, businesses within the sector are yet to be given clear guidance on the next steps to secure their futures and as a result these solutions are more crucial than ever. The government has recently announced the coronavirus Future Fund where they will issue convertible loans between £125,000 to £5 million to innovative companies which are facing financing difficulties due to the coronavirus outbreak. Like the other bailout schemes announced weeks ago, it remains to be seen how efficiently the Government will implement its plans and how achievable these schemes are for businesses in the hospitality sector facing longer-term closures.
As it stands, a number of pubs, restaurants and bars have been told by bank staff that they are not ready to process applications for loans and have not yet received instructions on how to deal with the government’s multiple schemes. The current rules also set out that no interest will be paid for a year, but this assumes that the crisis will have been averted by then, leaving the sector even more vulnerable as their closures seem to be more long-term than others. Many entitled to be furloughed will, after three months, find themselves unemployed with few routes back into work as companies freeze hiring while they assess the damage of the crisis.
A recent McKinsey report estimates that unemployment in Europe could peak in 2021 at 11.2%, following current 2020 estimates of 7.2%, the highest in 12 years as a result of the coronavirus. The report also found that a recovery to 2019 levels can only be expected by 2024. These figures highlight the work that UK businesses must do to delay its own population following similar patterns, by protecting as many jobs as possible and repurposing job roles to sectors that need them most at this time. As a sector, we have a big role to play in supporting our employees.
As it stands, we must accept the reality of the challenging times we are facing, but we should overcome them with the grit and community spirit that the hospitality sector is known for. By embracing new technological approaches and working to find employees jobs in other sectors, we can expect to weather the coronavirus storm together.
Jennifer Johansson is CEO & founder of Placed, the recruitment app for the hospitality industry.