Bristol hotels bosses have made a fresh plea to the government to extend the reduced rate of VAT for their businesses as they endure a bleak start to 2022.
Most members of the Bristol Hoteliers Association (BHA) say they suffered a difficult end to 2021 – with many reporting business was at least 30% lower in December than they had hoped for.
And with no furlough scheme to fall back on this time and with costs increasing, the BHA, which represents 40 hotels in and around the city with around 4,000 rooms between them, believes more government support is vital if its members are to survive over the next few months.
Hotels are also being hit by staff shortages as increasing numbers of employees self-isolate due to the omicron variant.
BHA chair Raphael Herzog, pictured, said: “At the end of last year, the government announced grants of up to £6,000 for hospitality businesses.
“But that would only cover us for what we lose in one day with a conference booking, as an example.
“As it is, there are very few conferences at the moment, because people are worried about mixing. Few people are travelling, even fewer are taking leisure trips, so it’s really quiet.”
He said January and February were looking “extremely slow” for the city’s hotels on the back of a very disappointing Christmas period.
“At the very least, we need the government to extend the reduced rate of VAT at least until the end of the summer in order to give us some chance of sustaining our businesses. Ideally, the reduced rate should be made permanent,” he added.
“Right now we have very little revenue, increases in costs and continuing staff difficulties. Not only is recruitment hard – in terms of available recruits and costs – but many businesses are losing people temporarily because they have to isolate.
“Some hotels have had more than 20 staff in one week unable to work because they have tested positive or have to self-isolate.”
Last July the government announced a temporary 5% reduced rate of VAT for the hospitality industry. While this was increased to 12.5% in October, it is only due to run until March 31, after which VAT will go back to the full rate of 20%.
The BHA is calling for the reduced rate to remain if they are to have any realistic chances of recovery, given all the current challenges.
Mr Herzog said: “It’s very hard to operate a business in the current climate, with more money going out than coming in, and an extremely challenging first quarter ahead.
“We need more support, not only from the government, but from other companies and customers to help with our long-term recovery from the impact of the pandemic.”
