Less than 1% of businesses which made insurance claim have received payout, UK Hospitality survey finds
HOSPITALITY operators in Scotland and across the UK continue to struggle to access financial support including loans, insurance claims and government grant payments, according to UK Hospitality.
In what the trade group has described as the first comprehensive survey of the hospitality sector since the COVID-19 pandemic began, it was found that – although 48% of businesses have applied for loans – 57% of those which had received a response had their application denied. More than half of applicants were still waiting on a response.
The most common reason for having a loan application rejected was lenders telling businesses to exhaust their own capital first, with a quarter of rejections due to the business being judged to be ‘in distress’ under government state aid rules.
There was also said to be “anecdotal evidence” of finance companies not lending to hospitality companies or new businesses.
Almost three quarters of businesses have claimed, or intend to claim, for business interruption insurance. However, fewer than 1% of businesses that have claimed have received a payout.
The survey received 378 responses, representing nearly 21,000 outlets which employ more than 370,000 people.
Kate Nicholls, chief executive of UK Hospitality, said the findings “lay bare the extra work that needs to be done by governments, banks and landlords to make sure as many businesses as possible can survive this crisis”.
“Hospitality was the first hit, the hardest hit and will suffer for the longest, and government support needs to reflect these facts,” said Nicholls.
“Hospitality businesses will be key to recovery as prolific employers, major tax contributors, and hubs for social interaction.
“Governments across the UK have provided unprecedented support to assist hospitality through this crisis, and that is extremely welcome. Yet, we are in this for the long haul. Everyone is rightly looking to how the economy and the industry restarts in a way that avoids a return of this horrific pandemic.
“Before we get to recovery, we need to make sure that the support measures already announced are getting through to business.
“Loans must be fast-tracked with minimal restrictions, grants must flow to all businesses that need them regardless of size, and the job retention scheme must be amended to reflect actual earnings.”