Ensuring Survival of Hospitality Businesses in Wales Requires Further Support says FSB

Press Releases 7 Jan 2022

Further support must be made available to support hospitality businesses hit by COVID restrictions

FSB (Federation of Small Businesses), is calling on the Welsh Government to review and increase the funding available to support businesses in the sector hit by Covid restrictions introduced over the festive period to ensure that businesses stand the best chance of survival thorough the latest Covid crisis.

Businesses in hospitality and those within the supply chain have reported a collapse in trade over recent weeks caused by significantly-reduced footfall and customer inhibition along with the impact of the latest Covid measures in Wales. Many businesses within the sector might normally have expected to make up to a quarter of their turnover over the festive period and the loss leaves businesses vulnerable and facing difficult decisions in an atmosphere of significant uncertainty. The situation is further compounded for other businesses like nightclubs forced to close by the measures introduced by Welsh Government.

Speaking about the pressures facing these businesses, FSB Wales Policy Chair, Ben Francis stated: “The past month has been devastating for so many businesses within hospitality. The scale of loss reported by business owners is more significant than anticipated and it seems clear that while the funding support announced last month was welcome, it may not be equal to the challenge and more funding will be required as well as reconsideration of the criteria for funding to stave off the threat of job losses and secure the future of these businesses through this latest crisis.

There is also real concern among businesses about a lack of clarity of what lies ahead and while a roadmap with clear milestones from Welsh Government through this crisis would be welcome, many businesses already face challenges in even getting around the next turn in the road ahead.

We know that hospitality businesses, like many SMEs, came into this latest crisis carrying an unprecedented amount of debt meaning they started in an already-weakened position. This latest situation will undoubtedly compound that and leave businesses with unenviable decisions about whether they can continue to maintain current staffing levels or meet supplier costs for instance.

While we understand that Welsh Government faces very difficult decisions and all businesses are mindful of the pressure on public services caused by this latest wave, we are concerned about the apparent open-ended nature of the existing restrictions. It is therefore important that Welsh Government outlines the conditions under which restrictions on Welsh businesses might be eased to allow them to plan for the future.

This latest crisis also demonstrates the fact that economic recovery for many in affected sectors such as hospitality, retail and leisure is yet some way off. Welsh Government should review its plans for the Business Rates holiday, maintaining it at 100% for the coming financial year. Similarly, we urge UK Government to reconsider the forthcoming rise in National Insurance Contributions which we know will impact businesses. Measures like these will give businesses headroom to move beyond this current crisis, into recovery.

Businesses within the sector have been asked to sacrifice much to help combat the Omicron variant. It’s important that Welsh Government recognises that now by ensuring it does all it can to help business through the coming weeks and beyond”.

Media contact

Ben Cottam

Ben Cottam

Head of Wales

About FSB

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