On top of the already extraordinary pressures facing everyone in the hospitality industry resulting from the COVID-19 pandemic, this week sees rent payments due from businesses that are quite literally empty.
UKHospitality has sounded the alarm about the multi-billion pound bill facing under-pressure pubs and restaurants this week.
The vast majority of hospitality businesses are leasehold, and the rent is payable quarterly in advance. The next pending rent day falls this Wednesday, 25th March, with penalties in the lease if a payment is made late or there is a default. These include the landlord being able to seize the property after 28 days.
Given that the vast majority of hospitality businesses are all now closed following Government emergency measures, and have been haemorrhaging cash over the last three weeks due to the Coronavirus pandemic, UKHospitality is calling for the Government to urgently enact a moratorium on commercial landlord sanctions and debt enforcement – as has been announced for residential properties – and signal this intention on Monday or Tuesday.
Kate Nicholls, CEO, UKHospitality, said: “The reality is that this is a critical week for bars and restaurants in London – and another incredibly difficult one. Our analysis suggests the quarter rent day for bars and restaurants is worth billions of pounds. This is money that simply isn’t in the system and most businesses cannot pay.
“We want to work with landlords and government to find solutions. We are asking government to look at extending the legal moratorium on forfeiture to include commercial leases – to protect lessees, landlords and most importantly help support and pay our staff.
“This will give us the time we need to negotiate and to focus on our teams. This remains the single biggest obstacle for the sector and unless we find a solution to this issue, it could undermine all of the Government’s great work to date.”
UKHospitality believes that a moratorium on lease forfeiture will help businesses preserve capital until they receive the first payment from the Government’s new Job Retention Scheme. Unless there is a solution to this issue, hospitality businesses will be unable to lead the recovery once this crisis is over.
This afternoon’s briefing from Prime Minister Johnson will undoubtedly address this issue, and we hope it will be addressed by Chancellor Rishi Sunak, who is looking very statesmanlike to date.
