The hospitality industry is a behemoth in the UK, accounting for nearly 7% of UK employment and responsible for a GVA of nearly £60 billion in 2019. However, the industry was brought to its knees by the coronavirus pandemic, as government restrictions sought to mitigate social contact in order to prevent the spread of the virus.
Restaurants and bars were able to retain a percentage of their staff via government furlough schemes, while arts-centred venues were able to apply for support via the Culture Recovery Fund. Nonetheless, stagnation of profits during successive lockdowns and regional tier measures were an existential threat to many businesses. In the aftermath of pandemic restrictions, though, hospitality is once again thriving – and is projected to experience close to 60% growth on the previous year.
Challenges Faced by Hospitality Industry Post-Pandemic
Every owner understand the importance of investment in business. As established businesses continue their return to form in the sector, the time is also ripe for new businesses to emerge. But for both, significant business risks remain a crucial part of any business strategy. What are the key risks to manage coming out of a global pandemic?
Despite the aforementioned packages of support and funding offered by the government, many hospitality businesses remained unable to keep up with overheads during lockdowns.
Many bars and restaurants, especially independents, run on miniscule profit margins; the effect of paying out-of-pocket for rent, administration and percentages of staff wages at the tail-end of the furlough scheme presents the risk of a black hole in finances, that a slow ramp in post-pandemic profits could merely see widen.
Even with pandemic restrictions largely removed from public life, consumer hesitancy continues to affect footfall numbers for businesses – especially cafes and brunch restaurants catering to an older demographic. With coronavirus still a presence in the UK, there are some unwilling to take the risk – with short- and medium-term effects on profits.
Surge in Footfall
Conversely, the removal of restrictions ahead of the Spring also signals a warm season like no other for the sector. The spring and summer months represent peak times for hospitality, and this year are expected to be busier than ever. An increase in footfall is naturally welcomed, but also brings with it the risk of liability; the more people in a venue, the more likely an accident could occur.
Public liability insurance is a must for hospitality businesses to mitigate the financial risk incurred by a claim regarding an accident, while maintenance, repair and installation of safety measures to accommodate a larger capacity can mitigate risk, at the expense of up-front cost.
The UK is experiencing a once-in-a-generation employment crisis – but not in the conventional sense. A ‘Great Resignation’ is seeing workers resign en-masse from positions, trading up for healthier lifestyles and new positions with better benefits.
Hospitality is a gruelling, high-demand sector to work in, and burn-out is a common experience amongst workers; if your business does not offer competitive benefits to offset the rigorous demands of the job post-pandemic, staffing could prove difficult.
Profits are Forfeited
Income loss as a result of a business disruption is imminent. Many businesses are closed solely on holidays and during natural disasters. They will now be closed for weeks at a time.
Most commercial property insurance policies have a clause that pays out only if there is actual property damage. In a nutshell, the answer is no.
NFP Corp. SVP Joe Colletta stated that the greatest threat is losing money. Numerous hospitality establishments have been forced to lay off 40% to 75% of their personnel owing to a lack of coronavirus insurance.
Attorneys would invariably assert that their clients’ ailments were caused by airborne poisons or surface pollution.”
This will require many legal firms to sue various insurance providers. “If someone pays,” Colletta stated, “the floodgates will flow.” This is going to be a long and drawn-out legal struggle.
Tourism Industry May be Fearful of Visitors
Consumers should be cautious about travelling, dining out, and staying in motels in the aftermath of the epidemic.
Colletta claimed that hotel rooms would be inappropriate. The hotel industry will require time to recover from the recent calamities. Cruise ships are doomed to fail. The tourism business would suffer if tourists become unwell.”
I genuinely hope our industry can work together to convince the public that these institutions are secure.
Travel Business May be Suspended
Throughout the epidemic, a simple and effective method of communication and document signing was adopted. Global travel is not required in my area of business. benefits of financial planning for business could save a lot of money in these difficult economic times.
Companies would assert that they are not at work “We did rather well with only telecom.” Many would prefer to do it than fly, so to speak.
Human Resource Affordability
Numerous employees in the sector were laid off as a result of the coronavirus. As a result, individuals seek employment in locations where they feel more safe and secure.
“These are individuals who are barely scraping by.”. Six months later, she calls again. Will you return?
Increase in Employee-related Accidents
As a result of furloughs and layoffs, workers’ compensation claims are expected to increase.
Workers’ compensation claims increase in a down economy. “Preventing future costs by enhancing claims management and advocacy today”
Insurance Company Payments
On the other hand, insurance prices are a worry. All parties are now debating mid-term adjustments.
As a result, “we return to the markets and declare that we require assistance.” Alter premiums or payment conditions.
In the year 2020, a new virus decimates the hotel business. Restaurants and hotels close their doors. No, flgh There are no gatherings or activities scheduled. Nobody knows for certain when the globe will reopen.