In the last six days, more than 650 people have cancelled their bookings at one of my restaurants. If that’s happening to us – busy restaurants with a chef who has something of a public profile – then imagine what’s happening to your local pub, coffee shop and the small independent restaurant around the corner. As soon as the government announced that people should work from home if they could, I began to lose sleep. For everyone in the hospitality business, it is looking like a bleak Christmas.
I spoke to a fellow chef yesterday who has a Michelin star, whose restaurant has lost 50% of its lunch trade for the next week and a half pretty much overnight. A two-Michelin-starred chef I know has had to close his restaurant between now and Christmas because a number of his staff have tested positive for Covid. This isn’t just about the top-end restaurants though, it’s throughout the entire industry – at the coffee shop in Marlow where I go, the owner told me that it was worryingly quiet. Many hospitality businesses take 20-25% of their yearly revenue in the December to January period. If up to a quarter of your revenue disappears, or is cut in half, that’s the difference between profit-making and huge loss-making, which in turn will become closure.
In hospitality the margins are very small. The moment those percentages start getting chipped away or destroyed – a 50% of loss of lunch revenue is a massive drop in revenue – you’re in trouble. You still have the same staff costs, the same rent and rates, the same costs for IT – they don’t disappear just because you have fewer customers. In fact, some costs, such as utility bills, are rising. The loans that the industry took on to see businesses through the early pandemic were massive, and have to be paid back. Nor is this just about the people who work in my restaurants, or the 2.4 million people who work in hospitality: there is a massive supply chain that includes farming, agriculture and fisheries. Those producers will also be hit. This comes on top of Brexit – and I don’t believe there is a single positive of Brexit for the hospitality industry.
I completely understand that public health is the most important thing, and the last thing people want to do is catch coronavirus and self-isolate when they’ve been looking forward to Christmas. I’m not blaming people for the cancellations. But when there is guidance to stay at home – but not mandates – there has to be some form of support for the industries affected. Hospitality feels it has been hung out to dry.
There is mixed messaging – if you have to put a mask on to go into a shop but you can go next door to the pub or the restaurant and don’t have to wear one: that’s very confusing for customers and businesses. The scandals about politicians’ illicit Christmas parties have also increased public distrust of any measures the government does put in place.
At the moment, my businesses are OK; my restaurants are not throwing away food, but the revenue loss is worrying. For example, 650 people having cancelled equates in that particular restaurant to about £65,000 in revenue, which is huge. And the cancellations are still coming. A restaurant that should be operating at 90-100% over Christmas is now down to 50%. That’s not a good position for any business, and this is in all likelihood just the start of it.
The next two or three years will be a huge uphill struggle to get on to an even keel. There will be many operators who will decide the last few years have been enough: there’s too much debt, this is too heavy a burden to carry, and there is no light at the end of the tunnel.
The last lockdown demonstrated the importance of restaurants. People could still buy food and alcohol, but what so many found they missed was social connection, noise, energy levels. Whether it’s a small local pub or coffee shop, or a celebratory occasion in a major, three-Michelin-star restaurant – these places are the beating hearts of our communities, an important part of the fabric of society. And they might not be there in the New Year.
Tom Kerridge is the chef-patron of the Hand and Flowers in Marlow – the only pub in the UK to be awarded two Michelin stars