Pubs and restaurants predict that Christmas cancellations made following the introduction of measures to limit the spread of the Omicron variant of Covid-19 in England will cut their festive takings by 40%.
While hospitality venues have not yet been forced to reimpose measures such as social distancing or mandatory mask-wearing, industry leaders said tougher restrictions had already caused irreparable damage to trade, especially in city centres.
Trade body UK Hospitality has forecast that takings will be down by as much as 40% for December, usually the most lucrative month for venues by far, after hard data from last week revealed early signs that customers were staying away.
Data from the trade body for Monday to Sunday of last week showed a 13% drop in trade and a 15% increase in cancellations, compared with pre-pandemic levels.
In central London, which is particularly affected by office workers following government guidance to stay at home, takings were down 40%, while there was a 25% surge in Christmas bookings being cancelled.
The figures cover a week that followed the identification of the Omicron variant and included the announcement of tougher Covid-19 restrictions, known as “plan B”.
With the evaporation of consumer confidence thought to have accelerated since then, bosses called for more assistance from the government to help them survive the effects of a second successive nightmare Christmas.
“The damage has been done,” said Phil Urban, the chief executive of Mitchells & Butlers, which owns 1,700 pubs and restaurants, including the O’Neill’s and Harvester chains.
He said customers had begun calling off events last week after the government announced measures including guidance to work from home if possible.
“We immediately saw cancellations. Anybody who was at all nervous, or any company that was planning a do was likely to cancel,” Urban said.
“We saw the impact on Friday and Saturday but we’ll really start to see the damage this week, particularly in city centres where historically we’d have lots of corporate events. That’s gone now and there’s nothing anyone can do to put it back.”
He called on the chancellor, Rishi Sunak, to extend a temporary reduction in the VAT levied on hospitality businesses. The tax break is due to end in April 2022, when the Treasury raises the rate from 12.5% back to its pre-pandemic level of 20%.
Investors responded to the gloom around the sector by selling shares in major hospitality companies on Monday.
Premier Inn’s owner, Whitbread, and InterContinental Hotels Group were among the biggest fallers on the FTSE 100, losing 3.5% and 3.3% respectively. On the FTSE 250, JD Wetherspoon shed 5.4%, while the Wagamama owner, Restaurant Group, declined by 3.9%.
The Wetherspoons founder, Tim Martin, called the government’s latest restrictions “arbitrary”, as the 861-strong pub chain warned investors that first-half profits could be wiped out by what Martin called “lockdown by stealth”.
With the industry facing yet more financial pain, the ale enthusiasts’ group Camra called for “extreme caution” from ministers before doing or saying anything that might further escalate the wave of cancellations.
The head of UK Hospitality, Kate Nicholls, said venues were the safest place to socialise at Christmas because of hygiene and ventilation measures, insisting people should not cancel events.
“The government’s official advice since the arrival of Omicron and the introduction of plan B has been very clear: go ahead with Christmas and new year parties as long as you are not showing any symptoms of Covid,” she said.
“Hospitality operators have invested heavily to ensure the safety of staff and customers, focusing on better ventilation, hygiene and sanitation … As a result, pubs, bars, restaurants, hotels and nightclubs are safer places in which to socialise with family and friends than at home this Christmas.”
Boris Johnson is facing a key vote this week over plans to introduce Covid passports to access certain venues, with up to 100 rebels in the Conservative party expected to vote against such measures.
The Night Time Industries Association, which includes nightclubs that would be among the businesses told to check vaccine status or test results, said the industry was facing “12 days of Christmas misery”.
The association’s chief executive, Michael Kill, said losing festive takings would be “a threat to the very survival of thousands of businesses and jobs.
“It is vital that the government and in particular the chancellor recognise the impact of the government’s public health messaging and swiftly implement proportionate financial support to ensure businesses and jobs are protected during this extremely challenging period.
“The chancellor may be wary of stumping up the cash but this will be better for the economy in the long run than putting businesses at risk of failing.”