Freedom Day has been and gone, and the future is one of cautious optimism

Victoria Oates, Director of Professional Services at Shelley Sandzer

Published by CoStar on August 3, 2021

A couple of weeks ago, the country was feeling positive. A first major final for the England football team in over 50 years, a heatwave on the way, and ‘Freedom Day’ just around the corner. With all of this in mind, it would have been very easy to get swept up in the optimism – particularly for the positive impact all of those things could have on hospitality – but as the dust has settled, it is now clear that caution is still required. 

The ‘pingdemic’ has well and truly taken over. We’ve all heard stories of shops and restaurants that have had to close because their staff, already incredibly limited in number, have been forced to isolate. Well the government has finally changed tack, allowing some double-jabbed staff in key services to continue working, conditional on regular testing. This was undoubtedly needed, but by not including hospitality, the industry has been placed at risk (again), and while it might not be considered ‘essential’ in its nature it remains one of the largest employers in the country. The problems are mounting.  

An awful lot of hospitality operators are having to take each day as it comes – planning for the weeks and months ahead seems tough at best, and pointless at worst. It is a blessing for many that they are allowed to be open and operating, but so quickly this blessing could become a curse.  

It has been well documented that many people who came to the UK from overseas to work have left these shores and not returned, impacting hospitality in a significant way due to its reliance on migrant workers. Indeed, predictions from UKHospitality suggest there are 180,000 unfilled posts in the sector, a vacancy rate of approximately 10%. Some restaurants have struggled to reopen at all due to staff shortages, and those that have have no doubt been looking very carefully at opening hours and cover numbers, due to staff unavailability.  

A shortage of personnel has created an inevitable hike in wages. Staff now need to be tempted, they cannot simply be brought in, so more money and better hours are fundamentals. The power is back in the hands of the employees in a big way – knowing how many jobs are out there, many see no reason to commit to the old model of unsociable hours and low pay topped up by tronc.  

What ‘Freedom Day’ has also brought us is uncertainty around safety. Embracing the ‘return to normal’ is all well and good, but operators are acutely aware of mixed perceptions on social distancing and mask-wearing. Cramming tables back together to maximise covers is not such a straightforward decision, as they cannot risk alienating potential customers who aren’t comfortable with that yet. What’s the point of doubling numbers if only half of your customer base wants to dine? 

The long list of problems goes on. Last year there was a campaign to prevent ‘no-shows’, but this appears to be rearing its ugly head again, with as many as one in five irresponsibly draining revenue from these restaurants. Financial implications are massive, particularly at a time when business rates are being paid again, and the end of furlough is on the horizon. Having the coffers depleted by ‘no-shows’ is more of a kick in the teeth than ever before. 

The moratorium running until next March provides a sense of security, but it may well be a false one. When all is said and done, operators will still have their debt mountains, accrued throughout the pandemic, to contend with. My optimistic side says they can have an upturn in trade between now and then to make a dent into this, but my realistic side recognises that without the right support, there will be casualties. 

But, for all the doom and gloom, the signs of recovery are there, and punchy operators are leading the way with confidence-boosting investment. The opening of a permanent location for SideChick, the lockdown-born delivery concept from the Patty & Bun team, is a real sign of what hospitality entrepreneurs can achieve, even in the most challenging circumstances.  Gordon Ramsay must certainly agree, using his presence and gravitas in the industry to roll out restaurants left, right, and centre, persuading landlords and investors to take a much-needed gamble on the industry, in the wake of chain closures.  

You can see it in the decision from JKS to takeover Arcade Food Theatre at Tottenham Court Road – these shrewd operators know the market as well as anyone, and are behind several of the most popular and highly regarded restaurants in London. We know landlords are having discussions about increasing their F&B and leisure footprint, so there’s no doubt about the desire from all sides to graft for the future of hospitality, and there is clear evidence of key people understanding its importance in creating vibrant places. 

This is why ‘cautious optimism’ is the phrase I think best summarises where we are. There are challenges everywhere you look, and these need to be respected, but while the industry continues to be led by our best-in-class entrepreneurs, there is a future worth looking forward to.