Hospitality in the News - 17 September 2020

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In our first newsletter after the summer (like no other) holiday period, we thought we would take a look at what happened whilst we were away.

In the UK, the "Eat Out to Help Out" scheme appears to have been incredibly successful for the hospitality sector. According to OpenTable, restaurant reservations were 53% higher compared with the Monday-to-Wednesday period in August 2019 and Barclaycard Payments said diners spent 34.2% more at restaurants during the subsidised days than in July. However, there were reports of a drop off in trade on the days when the scheme didn't apply. Given 1 in 4 licensed premises in the UK are still not trading, there are calls for the scheme to be repeated in the winter months.

The "small print" in legal Terms & Conditions has become the "big print" with the High Court finally ruling on the proceedings the UK's Financial Conduct Authority commenced against multiple insurers in respect of COVID-19 and Business Interruption insurance claims. Overall the High Court agreed with the FCA on most points, though many policyholders will likely still be left disappointed at their lack of cover.

COVID has turned hospitality businesses on their head – hotels in prime central locations in European gateway cities have really struggled whilst those in rural and coastal locations, and smaller urban locations, have done much better. In fact, the staycation boom has meant some UK hospitality businesses have had a really strong summer.

In potentially more positive news, last week there was discussion in the House of Commons around a long term cut to VAT for hospitality and hotels beyond the already announced cut to 5% until January 2021. This would certainly get our vote to stimulate the tourism economy and level the VAT field with a number of European destinations so as many tourism businesses as possible survive the winter months. Watch this space.