The owner operator of The Pig Hotels and Limewood says that the 2020 summer season has been all but written off for rural hospitality and that ‘longer term’ support and ‘very careful’ reopening rules are required to avoid the sub sector's collapse.
Published in full below, the letter has been signed by many other high profile figures in hospitality that have business interests in rural areas of the UK, including Rick and Jill Stein, Mitch Tonks, Mark Sargeant, Mark Hix, Michael Caines and Paul and Emma Ainsworth.
Hutson - who is one of the UK’s best-known and most influential hoteliers having co-founded Hotel du Vin in 1994 - highlights how reliant rural areas are on tourism and hospitality and the ‘ripple effect’ that such businesses have on other parts of the rural economy, including food and wine producers, contractors and transport.
“Despite its seasonal nature, the entrepreneurial flair and sheer creativity of the sector has enabled it to reach every corner of provincial Britain, often where no other enterprise or employment exists,” he write. “Rural Britain now delivers excellence in a diverse range of hospitality businesses.”
Hutson paints a bleak picture of his sector’s prospects without further help and requests a wide range of measures including extending the business rates holiday until end of Q2 2021; a reduction in VAT for hospitality businesses 2020/21; and further extension of time for repayment of deferred VAT/PAYE, allowing for normal trading to fund these payments.
Of particular concern - he says - is the requirement for increased spacing or restricted trading that may come in as restaurants and hotels re-open for business.
“The worst possible scenario for rural hospitality, would be the ‘perfect storm’ of furlough ceasing, hospitality opening up, but social distancing rules imposed. This toxic recipe would immediately translate to mass redundancies and the permanent loss of hundreds of thousands of rural jobs. This would be economically and socially devastating for rural Britain.”
Dear Prime Minister,
With the 2020 summer season all but written off for rural hospitality, longer term support and very careful reopening rules are required, if collapse of this sub sector and devastation of the rural economy is to be avoided.
I am writing to you as owner operator of The Pig Hotels and LimeWood, a South of England boutique hotel collection I have built over the past decade. We have invested close to £100m in rural Britain developing these hotels and created around 800 high quality permanent jobs in the process.
I am writing this letter personally, however, I know I speak on behalf of many rural hospitality business owners, a cross section of whom, employing circa 20,000 people, have chosen to support this letter.
I would like to begin by thanking you for the Governments prompt support for the hospitality sector during this Coronavirus period. These initiatives have been vital lifelines for our survival. In particular the furlough scheme and CBILS have undoubtably prevented significant job loss.
My company alone has 782 staff furloughed and has secured £4m of CBILS, for which we are thankful. The Business Rates holiday is also appreciated.
Quite apart from the important cultural contribution. You will know Hospitality is the UK’s 3rd largest sector, employing 3.2m directly and a further 2.8m indirectly, or 9% of all UK jobs and 11% of all regional jobs.
The post war demise of traditional rural employment has shifted to a reliance on tourism and hospitality. Despite its seasonal nature, the entrepreneurial flair and sheer creativity of the sector has enabled it to reach every corner of provincial Britain, often where no other enterprise or employment exists.
Rural Britain now delivers excellence in a diverse range of hospitality businesses. In particular the British food scene……it was not so long ago our food was viewed as a national embarrassment, but now British food tourism prospers. High quality rural food and wine producers, exciting bars, historic pubs, stylish restaurants and hotels are truly world class.
The economic ripple effect of hospitality on rural communities is of critical importance. Local tradesmen, contractors, shopkeepers, service stations, food and wine producers rely on hospitality and tourism to generate custom. As of course do the airlines, ferries, trains, coaches, buses and taxis.
Hospitality is a labour-intensive industry with high fixed costs and despite its success, operates with slim profit margins. Many rural businesses live from hand to mouth, from season to season, with little or no cash reserves. In the past few years the sector has been bombarded by an assault on these already slim margins.
High rent rises, increased food and beverage costs, hikes in business rates, utilities, insurance and the new National Living Wage
For most of us, break-even occurs at 70% plus occupancy. It is against this background and recognising the critical importance of hospitality to rural communities, that I wish to highlight the unique sensitivity of re-opening these businesses post lock down.
Of paramount importance is the health and safety of our staff and guests. Whilst we are keen to open our businesses, we strongly support the national effort of the social distancing measures.
Many rural hospitality businesses operate from small premises or re-purposed buildings, 2 metre spacing is physically difficult to achieve.
Critically, it is the negative financial consequence of the increased spacing/restricted trade that causes the greatest concern. Spacing rules will undoubtably push many rural businesses below their break-even point.
The worst possible scenario for rural hospitality, would be the ‘perfect storm’ of furlough ceasing, hospitality opening up, but social distancing rules imposed……. This toxic recipe would immediately translate to mass redundancies and the permanent loss of hundreds of thousands of rural jobs. This would be economically and socially devastating for rural Britain.
Rural hospitality survival proposals
With successful reopening during 2020 looking unlikely, surviving the 20/21 winter period is the challenge. Support will be needed until 2021 season.
• Backdate furlough to include all employees up until 19th March 2020, not just those RTI registered. I believe this is what was the Chancellors intention but has got lost in Civil Service detail
• Extend furlough and introduce a further developed, flexible, phased and part time scheme until end of Q1 2021
• Extend Business Rates holiday until end of Q2 2021
• Rent assistance, up to 12 month rent free period to be added to end of leases. Government to set up landlord fund
• Reduction in VAT for hospitality businesses 2020/21
• Further extension of time for repayment of deferred VAT/PAYE, allowing for normal trading to fund these payments
Thank you in advance for taking the time to read this letter.
Respectfully yours
Robin Hutson
Chairman and CEO of Home Grown Hotels Ltd and LimeWood Group Ltd
Robin Hutson has written to the Prime Minster detailing the plight of rural hospitality businesses and requesting further support from the Government.