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Highlights
- Concerns related to the Omicron variant and ensued restrictions have severely impacted various sectors, such as hospitality, travel, and retail, just ahead of the festive season.
- The hospitality sector received a £1 billion emergency support package, but it is being said not enough.
- The travel and retail sectors have not received any support from the government as yet.
The UK government-imposed Plan B measures, or restrictions similar to the earlier covid-19 lockdowns, in December amid a surge in Omicron cases.
Concerns related to the new variant and the subsequent restrictions are severely impacting several sectors which were expected to have a strong Christmas trading period.
Hospitality sector
The hospitality and leisure industry witnessed a surge in Christmas booking cancellations and a sharp drop in demand due to Omicron related fears. The festive period is typically a significant trading period for the sector.
The UK’s Chancellor, Rishi Sunak, announced an emergency support package for the hospitality and leisure sector totalling about £1 billion on 22 December. However, the package is being said insufficient when compared to the impact on the sector.
According to the industry trade body, UK Hospitality, the cost of the impact to the sector is estimated to be about £4 billion.
The night-time economy and music events sector, in particular, stated the scale of the package was not enough. These industries have cautioned that the current strategy of opening and closing businesses is heavily impacting firms.
Related Read: Sunak’s £1bn support package: Which sectors were left in the cold?
Recommendations: Some additional measures the government can take is to have strong leadership and provide a long-term strategy with sufficient clarity.
Travel sector
The travel sector has seen a surge in overseas trips cancellations due to Omicron fears. And the reintroduction of certain measures has also impacted the sector.
The average annual revenue of the industry plummeted by about 80 per cent from its 2019 levels, according to industry group ABTA. (This drop is before the emergence of Omicron and thus does not include its further impact on the sector)
Recommendations: The emergency support package unveiled on 22 December did not include the travel sector; thus, the government should announce a similar sector-specific support scheme for the travel sector.
Some other actions which can be taken are the immediate lifting of travel restrictions which are not necessary, the extension of travel businesses’ rates relief in FY 2022/23, support for firms facing repayments of loans, and several others.
Retail sector
The retail sector witnessed a sharp drop in the number of Christmas shoppers, despite this being one of the biggest shopping periods.
Footfall in the West End declined by 27 per cent on 21 December, compared with a pre-pandemic period on 21 December 2019, according to data from the New West End Company.
While the data was still 10 per cent more than the earlier week, it indicated a clear slump in footfall compared to the usual pre-holiday period rush seen amongst shoppers.
Recommendations: Retail, similar to the travel sector, has not received any sector-specific support package as yet; thus, one of the key actions that the government can take is to offer a robust financial support package to the sector during the winter season. Something more than the limited package announced by the treasury in December.
