Summer Economic Statement 2020: Impact on the Hotels Sector
Earlier this week, Chancellor Rishi Sunak appeared in the House of Commons to give his Summer Economic Statement.
The key initiatives announced by Mr Sunak demonstrate a willingness from the government to further support the hospitality industry as we approach month five of lockdown, and the effect on the industry becomes even more destructive.
The new support package includes a "kickstart scheme" to get unemployed 16 to 24-year-olds into work, new payments for businesses hiring apprentices, and a cut in VAT from 20% to 5% for the hospitality and tourism sectors.
Carine Bonnejean, Managing Director of Hotels, Christie & Co, comments:
“These new initiatives are a clear acknowledgement from the government that the hospitality industry is an essential pillar of the economy. Even though these measures are likely to just be temporary, they provide a much-needed boost for one of the sectors hardest hit by the pandemic, bringing the UK’s hotels scene in line with the rest of Europe’s.
This is great timing for the industry, as hotels can look to really capitalise on the summer season, and the booming popularity of staycations. Enticing guests to hotels and spending money locally over the next two months will be critical for the industry, and any incentive to do so will possibly save hundreds of businesses from distress – not just hotels but also dependent businesses who directly benefit from tourism (suppliers, attractions, bars and restaurants, shops etc.).
The VAT cuts announced will result in savings for consumers, but not all hotels are likely to pass on the price cuts and may bank these savings in order to rebuild cash flow position and to save jobs.
The employment scheme is also critical to the hotels industry, particularly considering Brexit and the mass of redundancies witnessed across the sector – this initiative may entice young people to discover our great industry!
This positive move from the government will continue to boost the hotels industry. Christie & Co have already seen a substantial increase in hotel buyer registrations, and this is another encouraging signal towards recovery.”