AT a time when excitement traditionally builds in the Scottish tourism and hospitality sector, the drip feed of news from the industry in recent days has been enough to sap any nascent Christmas spirit.
High-profile venues Gleneagles in Perthshire and the Old Course Hotel in St Andrews hit the headlines when they joined a growing number of hotels that are effectively moving into hibernation for the foreseeable future.
But it is not just the major tourism destinations that are taking this decision – hotels, bars and restaurants of all sizes are rapidly coming to the same conclusion. And that was before Tuesday’s announcement from First Minister Nicola Sturgeon, which means hospitality outlets in 11 local authority areas will be forced to close for three weeks from 6pm on Friday, when they move into tier four of Scotland’s lockdown system.
Many operators have already judged that it just does not make financial sense to stay open in the short term. The severe limitations placed on citizens’ freedom to travel in recent weeks, both across Scotland and from the key English market, had already curbed the ability of hotels to attract custom.
And even when people are still able to visit hotels, bars and restaurants in areas which remain in tier three, it is hardly the same experience.
In tier three, the sale of alcohol is prohibited, meaning hotel guests cannot enjoy a glass of wine or beer with a meal, while across the industry a 10pm curfew remains in place. It is not exactly an appealing prospect.
Now, with so much of the country in tier four, not far removed from total lockdown, more business owners in the hospitality industry are mulling whether to mothball operations until the new year at least.
While Ms Sturgeon said the new measures are designed to be a “short, sharp intervention”, you would be hard pushed to find an operator willing to bet on being permitted to reopen again on December 11.
If a further closure order is handed down at that stage, the industry will lose what crumbs of the festive season that would have been left, denying businesses a vital chance to restore badly-depleted cash reserves before the traditionally quieter New Year period is upon them.
Hotelier Russell Imrie summed up the predicament facing the industry on social media when he tweeted on Tuesday night: “There are emergency management meetings in hotels all over Scotland tonight where the question ‘should we not just close until at least January’ is being decided.
“This is the effect of inter-level travel being made illegal, no F&B revenue and no leisure travel from rest UK.”
Closing for a sustained period is not a strategy that comes without risk.
Indeed, some businesses may not have the reserves or financial backing to shutter for a second time, given that it comes so quickly on top of the protracted lockdown between March and July.
The recent move by the Chancellor of the Exchequer to extend until March the furlough scheme, which covers 80 per cent of staff wages up to a maximum of £2,500 per month, has rightly been broadly welcomed, given the peace of mind it provides to workers in the most affected sectors.
But while staff costs do account for a large proportion of a business’s overheads, they are far from the only ones. Any business taking the decision to close for a long spell must also find a way to cover the cost of significant outgoings – loan repayments, utility bills and insurance costs, to name but a few, all while there is no money coming in.
As Mario Gizzi, co-owner of the Di Maggio’s Restaurant Group, observed in a radio interview this week, furlough may help save jobs, “but if businesses do not survive, we will have an even bigger problem”.
On that score, the Scottish Licensed Trade Association is in no doubt that the second lockdown will tip many businesses over the edge.
“This is the worst possible news for the licensed hospitality industry and there will be many operators who will now be seriously considering if their businesses have a future at all – that’s how serious the situation is,” said managing director Colin Wilkinson.
If there is to be any form of happy ending to this protracted nightmare for the industry, it needs the support from lenders, creditors and government to help it through the next few critical months.
After all, there is genuine hope now that we could be in the final furlong of this horrible journey.
The hugely exciting breakthroughs we have heard on the vaccine front over the last two weeks have provided a genuine prospect of there being light at the end of the tunnel.
If the NHS is in a position to start rolling out vaccines in the new year, or perhaps even earlier, then we could be moving to a situation where significant parts of the population will be vaccinated by the time the 2021 tourism season looms into view.
On that basis, businesses in Scotland badly affected by the latest lockdown measures, and not just in tourism and hospitality, should be given all the support they require to survive the final few months of the crisis.
And that includes support for suppliers, such as food and drink wholesalers, which have kept going amid the crisis despite receiving no direct grants from government.
Banks which benefited so much from the public purse during the great financial crisis must stand by their customers, especially those with perfectly sound businesses that are only struggling because of the health crisis, and government must dredge up all the support it can to back those in that position.
On Tuesday, the Scottish Government announced a further £30 million of support for Covid-hit businesses, to be distributed through local authorities.
In such straitened times, any form of financial help is welcome, even a temporary closure grant of £2,000, but the desperate nature of the situation means much more is needed.
There is concern in the business community that the level of financial support is not enough and, moreover, that there are glitches in the current system that still need to be ironed out.
There is also the crucial matter that some firms continue to be excluded, despite the restrictions effectively wiping out their markets. These include suppliers of goods and services to the hospitality sector, be they wine merchants or cleaners of beer lines in pubs.
Stuart Mackinnon, external affairs manager at the Federation of Small Businesses, said the Scottish Government should either expand the scheme to include such suppliers, or work with local government to ensure the extra funding reaches them too.
He observed that it was difficult for businesses to keep track of the multiple support schemes being offered between the Treasury and the Scottish Government, and said there is often too much of a time-lag between grants being announced and them getting into business bank accounts.
“In our experience, a lot of these schemes take a fortnight to get up and running, from the point of announcement to their delivery,” he said.
The time for any form of prevarication is over. Only rapid and decisive action will do if we are to save as many businesses and jobs as possible.
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