Most hospitality businesses are not viable after the “worst December’s trading in living memory”, an industry body has warned.
The Scottish Hospitality Group said its members took only 20% of last year’s earnings during the Christmas trading period, losing on average £12,000 in revenue per week per premises.
SHG said the support available during the coronavirus pandemic is “completely inadequate” and claimed that in many cases what there is has not appeared months after it was promised.
The group, which represents several large hospitality companies, said the massive cut in revenue will impact payments for property and equipment rent and utilities until at least the summer, affecting suppliers, investors such as pension funds and others who depend on the industry.
Stephen Montgomery, SHG spokesman, said: “Without Christmas, when we earn around 30% of our entire annual income, most hospitality businesses just aren’t viable.
“We’ve had the worst December’s trading in living memory and we’re facing the worst start to a year ever. Instead of helping, our political leaders are squabbling with each other. It’s like arguing about who throws the lifebelt when someone’s already under water.”
SHG said that during lockdown, businesses continue to spend on average nearly £6,000 per week per premises on fixed costs and contributions to the furlough scheme.
The organisation, which represents businesses including the DRG Group, Signature Pubs and G1 Group, called on the Scottish and Westminster governments to work together to support the sector.
Mr Montgomery said: “The continued furlough scheme is welcome but it’s there to protect jobs rather than businesses, and we still have to pay all sorts of fixed costs.
“Even those businesses that survive will seriously struggle to recover this year. Not only is the support completely inadequate, in many cases what little is available hasn’t appeared months after it was promised.
“We will soon be proposing specific, realistic measures that both governments can introduce so we’ve got a fighting chance of getting back on our feet by next year.
“First of all though, we need them to grow up and start working together so that the hospitality sector still exists to drive our economic recovery once the virus is under better control.”
A Treasury spokesman said: “We’ve taken swift action throughout the pandemic to protect lives and livelihoods, and this week’s cash injection will ensure we continue to support businesses and jobs through to the spring.
“We’ve already extended the furlough scheme until April, providing certainty for businesses as they navigate the months ahead.
“And we’ll have a Budget in early March to take stock of our wider support, and set out the next stage in our economic response.”
Scottish Secretary Alister Jack said: “As throughout this crisis, the UK Government’s priority remains to keep people safe and support jobs in all parts of the UK.
“The Chancellor has set out additional support for businesses in England. We hope the Scottish Government uses some of the £8.6 billion we have provided to support struggling Scottish businesses similarly.
“This is on top of the direct UK Government support for people and businesses in Scotland – including our furlough scheme now extended to the end of April, self-employed support, business loans and procuring and paying for millions of doses of the Pfizer and Oxford vaccines.
“The strength of the Union and support offered by the UK Treasury has never been more important.”
The Scottish Government has been asked for comment.