Catering Scotland

Peter Seymour

As the lock-down starts to ease, questions are understandably being asked by hospitality operators about when exactly the hospitality industry will be allowed to open up again, and to what extent.

Pete Seymour sheds some light on why this is crucial for the sector as a whole and why everyone should get behind this request.

In the past few days I have seen a growing number of requests from various industry bodies looking for a date for the reopening of hotels and leisure businesses in Scotland. While the UK and Scottish governments have yet to show their hand in this regard, I wanted to provide some insight into why it’s so crucial for …..

Future bookings

Social distancing aside, operators are already fielding calls from people looking to get away as soon as lock-down eases. These businesses understandably want a degree of certainty that they can hold a room for July, August or September. However, without a definitive date, many feel like they should not take the booking because the later in the year the lock-down eases, the more likely they are to remain closed until 2021.

We are already close to the middle of the 2020 season. Every lost day now means that it is less likely that opening would be a sensible decision. The costs for remaining closed are broadly calculable, whereas the potential losses for opening and operating unprofitably could end up being considerably more. It might be better for the owner to accept this and look to reopen in March or April.

Phased reopening

Empty options: Many hotels benefit from outdoor areas but for those who do not, the reopening rules could prove more costly than staying closed

We note that phase 2 of the Scottish Government’s route map, which is likely to begin on 18^th June, will allow outdoor areas to reopen first. This is fine for those so equipped but what if the hotels without that option? What restrictions are to be forced upon hoteliers in terms of capacity, cleaning and other operational elements?  Without understanding the detail of what will be required, business owners simply cannot plan staffing levels, consumables required and the costs of implementing appropriate social distancing measures, whatever they will be.

There are plans afoot for an industry-led cleanliness certification but this too has yet to be agreed. The UK Hospitality (UKH) guidance is helpful and sensible; for example, taking cutlery to the table when you seat a guest and only taking orders at tables – but the market needs to know precisely what rules the Government will enforce upon the sector. Hotels are likely to be allowed to reopen fully in Phase 3, but no date has yet been discussed as to when this phase will begin.

This needs to be addressed sooner rather than later.

Supply chain

Businesses have not purchased much, if anything, for three months and so the supply chain is not yet ready to restock thousands of hotels across Scotland. All of the perishable goods that are needed to run a successful establishment will now have expired. Regular suppliers may or may not still be trading. The catch for those that are still in business is that if every business places an order at the same time when reopening dates are confirmed then these suppliers will be faced with the empty-shelves issues that we saw a few months ago in supermarkets. A further consideration is whether all accounts are up to date. Has the hotel paid its outstanding sums and can it afford to do so?  It is my understanding that suppliers will need around three to four weeks’ notice to ramp up to historical levels when businesses resume.

Staff returning from furlough

With the UK Government’s imminent amendments to the furlough scheme just around the corner, it is not yet clear if hotels and leisure will have different rules. If hotels are not allowed to reopen until phase 3, or they do not have an outdoor area, how are they going to pay their contribution towards the furlough wages?

Can a business really be expected to contribute to furlough wages if the external areas are open but the weather is inclement and their trade suffers?

There are many intricate and detailed issues that need addressed as soon as possible for the hotel market to plan and prepare for re-opening.  I would argue that it would be easier to delay a week or two, rather than rush an opening.  Therefore, surely it is better for a date to be given and opening delayed to allow proper planning than for everyone to have to rush to reopen with very little notice given?

Pete Seymour is Head of Licensed Trade and Leisure Agency at Graham & Sibbald. Their team of specialist chartered surveyors work extensively in the Scottish hospitality sector, advising and assisting clients on all aspects of commercial property transactions.

Visit www.g-s.co.uk for more information.