When customers want to cancel their bookings, firms ask them for assistance

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Businesses are putting pressure on government officials to help firms affected by the increase in Covid cases.

CBI called on ministers to support future restrictions, while UK Hospitality urged that rates for businesses be deferred in order to extend VAT discounts.

Omicron has impacted consumer confidence, leading to cancellations of hospitality bookings.

According to the Treasury, it did not intend on extending support beyond existing measures.

The Treasury acknowledged that loans and grants are cheaper and more efficient than direct assistance to companies if they need it. The government is excluding any possibility of the furlough system being reintroduced.

Although the UK government and its devolved administrations do not place any restrictions on business, many companies have experienced a drop in their customers, at a time they are trying to recover lost earnings.

Hoteliers have estimated that December will see a 40% drop in takings, with London suffering twice the amount.

UK Hospitality has asked for an extension to the 12.5% discount VAT rate beyond March 2022 and deferring business rates for the first quarter next year.

British Chambers of Commerce also called on the Treasury support for businesses.

Celebrity chef Tom Kerridge said that one of his restaurants saw 654 cancellations within the last six days. It was a season when industry leaders are trying to get back to some kind of normality.

Bar and restaurant owners would not have problems if Covid forced them to close their establishments from both a scientific and government point of view, he said. As long as there was financial support.

He said, however: “It seems like there is a reactive approach rather than being proactive.

“If people are told to work at home (which I can understand and get), it has a knock-on impact on other businesses that rely on lunch trade…the coffee shop around the corner, the newsagent within the city, hairdressers, and nail bars.

“There will be many other places that are unable to deal with the situation.” Many places that are shutting down will be closed without financial support. They will also close and not reopen for business in the next year.

Sam Morgan, owner of the restaurants Craft 8 and 8 stated that his business had suffered a decline of 150 books per days with 600 cancellations.

“We’ve got the perfect storm,” said he. Consumer confidence is low which means that future bookings and bookings to cancel current cancellations will be difficult.

According to a report by Corporate Customers, customers cancel Christmas and New Year bookings because they are nervous about the risk of exposing customers and employees to illness. They must also isolate themselves.

Morgan stated that the current situation is “extremely concerning”, and revenue from the holiday period was used to pay for less-busy times during the first month of the year.

Ratnesh Bagdai (co-founder of Brindisa, The Bailiwick Free House) said that it was frightening to “see how central London had emptied” following the speech by Prime Minister Tony Blair.

“My concern about this is self-lockdown, without the government support. While we’ve been through other lockdowns or restrictions, any more will be even worse for the sector, particularly the smaller independents,” said he.

CBI demanded that the government issue an order to instruct councils to release any unused rates and grants relief immediately to those in greatest need.

Anne Marie Morris, Conservative MP, tweeted that the government had “effectively told people not to go to hospitality venues this Christmas”. Then financial assistance should be offered.

President of British Chambers of Commerce Baroness Ruby McGregor Smith said that businesses face a “two-punch combination of severe issues with staff absent and plummeting customer confidence.”

“The organization has provided no rationale for its belief that it does not require any new support. They should be treated better.

Many of these businesses, which have endured nearly two years in difficult trading conditions, now see their vital festive income disappear before their eyes.”

Rain Newton-Smith was the chief economist at CBI. He said that implementing Plan B measures was “the right decision to make”, but also stated it had “dented demand and consumer confidence” and would need further support for firms in trouble if future measures are introduced.

Omicron is likely not to present the last challenge that the coronavirus presents the economy and the country. How can we be confident with all the variants of the coronavirus?

According to the Treasury, the government had previously stated that it “acted quickly” in order to stop the spread of the virus with the booster vaccine campaign. However, the Treasury also said that they “avoided damaging economic and socio-economic restrictions by permitting businesses to continue to operate”.

Source: BBC.com

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