Summary

• Trade body bosses from various industries like travel, hospitality, and retail have called for a deal with landlords to forgo rent built up amid Covid-19.
• The business leaders want the Boris Johnson government to convince commercial landlords for this deal.
• Retail and hospitality businesses alone have built up a combined £5bn of rent debt.

It is not new that UK businesses are having a hard time to make a comeback post the Covid-19 lockdowns and restrictions. As a result, many industries have changed the way of operating. In fact, many venues were forced to come up with alternatives to do their businesses since the restrictions and social distancing rules were imposed. 

As a result, trade body bosses from various industries such as travel, hospitality, and retail called for a deal with landlords to forgive their built-up rent.

At the Treasury Select Committee hearing, the bosses said that only easing restrictions is not enough to avoid business failures and job losses in the sectors operating with heavy debts.

The trade body bosses have warned the UK government that they should either convince commercial landlords to forego some of the pending rent during the pandemic or should be ready to face a wave of insolvencies ahead of the shortfall of payment, which is due in July.

Retail and hospitality operators have a pending £5 billion of rent. The moratorium on pending amount for commercial rent will expire on 1 July.

Kate Nicholls, CEO of UKHospitality, has warned that a third of the trade body members having 90,000 venues were expecting back-dated rent demands after the moratorium ends.

Nicholls said the problem is that many businesses are still not able to trade, and if the moratorium is lifted without a resolution plan, the government may see closures and cases of bankruptcy.

Voicing similar concern, Helen Dickinson, CEO of British Retail Consortium, said that only two weeks are left for the deadlines to be over, and most traders are not sure what will happen next.

As a solution to this problem, several trade bodies had proposed a scheme, which proposes that the government should enter a deal with landlords to forgive at least 50% of the rent built-up in pandemic. However, nothing is clear yet on the government’s part.

Mark Tanzer, CEO of ABTA, said the tourism industry is facing similar challenges as the tourism industry is on nearly impossible levels, especially when Portugal was suddenly removed from the “green list” under the UK traffic light system in a bid to prevent the spread of Covid-19 infections.

He added that support measures should be granted soon including the one for the travel sector because with the government’s current attitude, Britain might lose a generation of travel companies.

Also Read: Jet2 Plc Pushes Back Restart of Flight and Travel as Portugal Gets Removed from Green List

Let us look at the trading pattern of some hospitality stocks amid the crisis:

Whitbread Plc (LON: WTB)

A constituent of FTSE100, Whitbread is the biggest hotel chain in the UK and owns the brand Premier Inn.

The stocks of Whitbread Plc were up 0.77% and were trading at GBX 3,255 on 8 June at 09:08 GMT+1. In the last one-year stock has delivered a return of more than 20%.

Intercontinental Hotels Group Plc (LON: IHG)

Intercontinental Hotels Group Plc is one of the world’s leading hotel company which owns multiple brands such as Holiday inn, Holiday inn express, Staybridge Suits and Hotel Indigo.

The stocks of IHG Plc were up 1.53% and were trading at GBX 5,050 on 8 June at 09:10 GMT+1. In the last one-year stock has delivered a return of around 17%.

Ryanair (LON: RYA)

Founded in 1984, Ryanair is a low-cost Irish airline. As of 7 June, the company holds the market capitalisation of £15,649 million.

The stocks of Ryanair were up 0.52% and were trading at GBX 16.46 on 8 June at 09:12 GMT+1. In the last one-year stock has delivered a return of around 28%.