Over 330,000 hospitality jobs at risk due to rent debt

The £2.5b rent debt hanging over the hospitality industry poses a threat to the future of thousands of businesses and over 330,000 jobs, according to analysis by UKHospitality.

The current moratorium on evictions from commercial premises has been extended until 30 June and a government call for evidence on a solution to the issue ended on 4 May.

Without further action it is feared many hospitality operators could face bills for hundreds of thousands of pounds of rent arrears, despite being unable to trade for much of the past year.

A survey of UKHospitality members, which include over 730 companies, found 52% have not been given any extension to pay rent. Nearly three-quarters (73%) are either unable or don’t know how to pay their rent arrears, and 40% have been unable to reach a deal with their landlord on rent concessions.

A separate study of 360 businesses by Cedar Dean and the Night Time Industries Association (NTIA) found 75% of tenants will be forced to look at insolvency or restructuring if further support is not provided after the rent moratorium and 70% believe there will be further redundancies. Some 85% said they did not complete the government survey and only 4% who did found it to be useful.

UKHospitality chief executive Kate Nicholls said many business owners had seen no engagement from landlords over the issue.

The NTIA and a group of MPs in the All Party Parliamentary Group for the Night Time Economy have proposed a ‘shared burden’ solution that would see both landlords and tenants contribute towards rent arrears.

Other hospitality business leaders have backed an Australian-style solution, which includes a mandatory 50% reduction in rent with the remaining balance paid back in instalments.

Nicholls said: “There has to be a sharing of the pain caused by lockdowns and trading restrictions. Government must extend and expand protections until the end of the year, and force the writing off of a fair amount of Covid rent debt.”

Of respondents to the Cedar Dean and NTIA survey, 77% said they were not confident the government will offer suitable options after the moratorium ends in June.

MPs from the APPG for the Night Time Economy will discuss the issue during a parliamentary session on 12 May.

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