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Back to Business part 2: hospitality

Author: ICAEW Insights

Published: 06 Apr 2021

From car park beer gardens to hotel business meeting rooms, ICAEW Insights explores how COVID restrictions triggered hospitality’s “entrepreneurial spirit”.

Despite hospitality being among the sectors hardest hit by the pandemic, CEO of the Hospitality Professionals Association (HOSPA) Jane Pendlebury believes that the resilience and agility shown by many in the industry will hold it in good stead as the government’s lockdown measures ease.

In the early stages of the pandemic, the hospitality sector was almost brought to a halt as pubs, restaurants and hotels recorded virtually no income in April and May last year, according to the Office for National Statistics (ONS). 

“I think hospitality has been one of the worst-affected sectors, explained Pendlebury. “Most of our venues - hotels, pubs, bars, restaurants, clubs - haven't been open for the majority of the lockdown and haven't seen any revenue at all, apart from a brief period over the summer. 

“Some were able to operate takeaway and delivery opportunities and some hotels housed key workers and even the homeless, but nothing compared to 2019 income. Revenues have been devastated over the last year because hospitality sites have been shut more than they've been open”.

Lumped together

As the pandemic went on, Pendlebury, who also sits on ICAEW’s Travel, Tourism & Hospitality Community in partnership with HOSPA, had an issue with the support provided to her sector. She feels hospitality has been “lumped together as a great big industry - all doing the same”.

“It certainly is a great big industry, but there's a massive difference between a pub on a busy high street and a hotel or a fine dining restaurant,” she pointed out. “And to class both of those distinct businesses in the same category is missing the point of the diversity in the industry. A minister dedicated to hospitality would really help.”

She added: “If you were to watch the news, you would see hospitality often being defined as a busy pub in a student town where, as the evening progresses, there might be less attention paid to social distancing or mask-wearing. Yet many other hospitality venues are possibly cleaner than your own kitchen table would be as it's thoroughly cleaned in between each guest.”

A lot of “entrepreneurial spirit”

As the government loosened pandemic restrictions last year, hospitality businesses started to employ new strategies and adapted in any way they could to stay afloat. For example, hoteliers who relied on business travel suffered a dramatic loss of revenue, so many decided to change bedrooms into meeting rooms for local businesses that didn’t have the space to house socially distanced meetings in their offices. This way, if people were struggling to work from home, they could potentially work from a hotel bedroom instead. Pendlebury believes that as lockdown eases this time around, we will see more of the same agility from the sector.

“There's been a lot of entrepreneurial spirit going on around city hotels because they recognise they're not going to benefit from the staycation rush which the coastal and rural properties really are benefiting from,” she added. “Coastal and rural properties are seeing a massive surge in bookings for the summer because people have not currently got the option to travel abroad.”

What has the pandemic taught you about the sector?

“It's taught me how resilient people who work in hospitality are, how resourceful, how entrepreneurial and considerate they are. For example, there's been hotels housing homeless people, NHS or military workers, places that have been feeding key workers just from their own stocks. There have been hotels housing families whose children are in Great Ormond Street Hospital, and others used as quarantine facilities,” Pendlebury said.

The hotel side of the hospitality industry is gearing up to reopen on 17 May. There are elements of hospitality that can open before, for example, people can go to pubs and sit outside in April. Pendlebury says she knows of multiple pubs that are working up towards that and making an 'outside space' out of car parks and all sorts of storage spaces to enable them to open and meet the new criteria.

From one CEO to another

Stepping back from the balance sheets now that end dates are within touching distance, Pendlebury has advice for fellow financial leaders: “Just take time to listen and understand - not just the black and white issues that are there staring people in the face, but the emotional effect this has had on people as well. That's crucially important. It's not all about cashflow. Without staff, guests or clients, your business will no longer exist - so don’t forget the human element.” 

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