Every day lost just now makes reopening this year less viable for seasonal businesses, writes chartered surveyor Peter Seymour
IN the past few days, I have seen a growing number of requests from various industry bodies looking for a date for the reopening of hotels and leisure businesses in Scotland. This is crucial for the sector as a whole and everyone should get behind this request for a number of reasons:
Operators are already fielding calls from people looking to get away as soon as lockdown eases. They want comfort that they can hold a room for July, August or September yet, without a date, many operators feel like they should not take the booking because the later in the year the lockdown eases the more likely they are to remain closed until 2021.
Many hotels in Scotland are seasonal and, in 2020, we are getting very close to the middle of the season. Every day lost now means that it is less likely that opening would be a sensible decision. The costs for remaining closed are known, whereas the potential losses for opening unprofitably could be considerably more. It might be better for the owner to accept this and look to reopen in March/April 2021.
Phase two of the Scottish Government route map (likely to come in on June 18) will allow outdoor areas to reopen first, but what if the hotel does not have an outdoor area? What restrictions are to be forced upon hoteliers in terms of capacity, cleaning and other operational elements? Without understanding the detail of what will be required, business owners simply cannot plan staffing levels, consumables required and the costs of dealing with implementing appropriate social distancing measures. There are plans afoot for an industry-led cleanliness certification but this has yet to be agreed. The UK Hospitality guidance is helpful and sensible – for instance taking cutlery to the table when you seat a guest and only taking orders at tables – but the market needs to know precisely what rules the government will enforce upon the sector. Hotels are likely to be allowed to reopen fully in phase three, but no date has yet been discussed as to when this phase will begin. This needs to be addressed sooner rather than later.
The supply chain is not ready to restock thousands of hotels across Scotland immediately. Businesses have not purchased anything for three months. All of the perishable goods that are needed to run a successful hotel have now expired (for those operating a freshly prepared menu). The regular suppliers may or may not still be trading, however if every hotel places an order immediately then suppliers will be faced with the empty shelves that we saw a few months ago in supermarkets. A further consideration is whether all accounts are up to date. Has the hotel paid its outstanding sums and can it afford to do so? It is my understanding that suppliers will need around three to four weeks’ notice to ramp up to historical levels when businesses resume.
Staff returning from furlough
With the UK Government’s amendments to the furlough scheme imminent, it is not clear if hotels and leisure will have different rules. If hotels are not allowed to reopen until phase three, or they do not have an outdoor area, how are they going to pay their contribution towards the furlough wages? Can a hotel and leisure business really be expected to contribute to furlough wages if the external areas are open but the weather is inclement and their trade suffers?
The points raised here are not exhaustive. There are many intricate and detailed issues that need addressed as soon as possible for the hotel market to plan and prepare for reopening.
I would argue that it would be easier to delay a week or two, rather than rush an opening. Therefore, surely it is better for a date to be given and opening delayed to allow proper planning than for everyone to have to rush to reopen with very little notice given?
Peter Seymour is head of hotel and leisure at Graham & Sibbald