Hospitality industry faces £717 million loss

The UK hospitality sector is expected to lose around £717 million (US$955m) this year as festive functions are cancelled, with Campari Group urging firms to donate 5% of their unused party budgets to on-trade workers.

Opinium was commissioned by Campari UK to carry out research online in November 2020 among senior decision makers in 250 businesses with more than 50 employees.

The research found a 73% drop in the proportion of businesses planning to hold parties in hospitality venues, from seven in 10 in 2019 (71%) to just two in 10 this year (19%).

According to ONS data, 71% of businesses held a Christmas party for staff in a pub, bar, restaurant or other hospitality venue in 2019. The average spend per head was £49.80 (US$66). As such, the total estimated spend on employees in hospitality venues was £979,416,600 (US$1.3 billion).

The research found that in 2020, 19% of businesses are planning on hosting a Christmas party for staff in an on-trade venue. Therefore, the total spend on employees in hospitality outlets is forecast to be £262,097,400 (US$349.2m).

In response to the findings, Campari UK is calling on firms to use the money they would have spent on Christmas parties on hospitality workers. Campari is asking for companies to donate a suggested 5% from their unused party budget to industry worker relief fund, Shaken Not Broken. The fund was established by Campari in April 2020 to offer help to on-trade workers during the pandemic.

Campari said companies such as the Craft Gin Club, Revolution Bars Group, and HT Drinks, along with entrepreneur and Dragons’ Den star Sarah Willingham, have all donated to the fund.

Willingham said: “Even in normal years, the hospitality sector relies on a bumper December to balance its books and pay employees. And 2020 has been anything but normal.

“As a result, the people who often play such a key, unrecognised role in company culture and staff morale, are counting the cost more than almost any other workers. Donating unused Christmas party budget means that the friendly faces on the other side of the bar will be more likely to still be there to welcome us back when normality returns.”

The research found that two fifths of British businesses (38%) have completely cancelled or postponed any celebration this year, with 18% downgrading to a virtual event and a further 8% still yet to decide.

One in four cancellations (23%) are due to the intended venue being shut as a result of Covid-19 restrictions, with 6% due to the venue closing down completely. One in five businesses (12%) also said their office local has been forced to shut permanently because of the pandemic.

Campari also cited recent data from hospitality trade bodies that warned there could be 750,000 fewer people in jobs in the sector by February next year, as 72% of employers expect to operate at a loss and be forced out of business.

Campari said a £500 (US$666) donation from an unused Christmas party budget would give two struggling hospitality workers financial assistance, mental health and wellbeing support, or an education and training grant to help boost their employment opportunities.

‘Extremely challenging’ times

Brad Madigan, managing director of Campari UK, said: “The unavoidable cancellation of a large number of work Christmas celebrations will place even more financial pressure on the hospitality industry, already struggling under the weight of reduced footfall, curfews and widespread lockdowns. Many hospitality venues have cut staff numbers, reduced staff hours considerably or, even worse, not reopened at all since March – placing hundreds of thousands of staff on furlough or directly into unemployment.

“That’s why we’re calling on the UK business community to donate a small part of what they’ve saved from cancelling this year’s Christmas celebration events to the Shaken Not Broken Fund.

“We know times are extremely challenging for many, but any donation, however large or small, will make a genuine difference to people’s lives. It really is time to support those in the hospitality industry who would normally be serving us at this time of year.”

Companies can pledge their donation via The Drinks Trust charity’s website using Paypal and the reference ‘SHAKEN’, or by contacting marketing@drinkstrust.org.uk to request an invoice.

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Author: Nicola Carruthers