Covid Scotland: Calls for financial support amid ‘avalanche of cancellations’ for struggling hospitality industry as Scottish Government urges people to cancel Christmas parties

Christmas is usually the busiest time of the year for the hospitality industry.

Hospitality businesses have called for emergency financial support after suffering an ‘avalanche of cancellations’ overnight, as the Scottish Government urged people to cancel Christmas parties and limit household mixing to curb the spread of Omicron.

Bars, restaurants and nightclubs said firms would “not survive until spring” following the latest blow to the industry, with reports of some businesses having lost in excess of £200,000 of Christmas bookings overnight.

They called for an emergency financial support package from the Scottish Government to help stem the losses from what would usually be the sector's busiest period.

Yesterday, Nicola Sturgeon reiterated advice from Public Health Scotland for work Christmas parties to be scrapped, saying there was potential for them to become “super spreading” events and said she could not rule out further restrictions if necessary.

However, businesses have called for urgent financial support – including a return to the UK Government furlough scheme, which saw hundreds of thousands of people’s wages paid for by the government amid lockdowns – calling the new warnings a “devastating blow” to their industry.

Ms Sturgeon said she would speak to the UK Government, in a Cobra meeting attended by the four nations and chaired by Michael Gove, minister for intergovernmental relations, to discuss further financial support for Scottish companies.

She said: “There is a significant risk with Omicron - and we are already seeing the reality of it - of Christmas parties or events with lots of people becoming super-spreaders. And if that happens lots of people get infected and if these are work events, as well as the risk to individual health, there is a risk to the ability of the workplace to operate as people have to isolate.

“So the public health advice - which I have no alternative but to agree with given the evidence of risk that I know about and have now shared with you - is that we should all think a bit more carefully about unnecessary contacts, especially in crowded places just now. And that it would be sensible to defer work Christmas parties.”

“Now I know this has a big impact on businesses which is why we are considering - and pressing the UK government - on financial support. But once again we face a situation that frankly has no easy options. We know that any additional protective measures will cause social and economic harms – especially after almost two years of this pandemic.”

She added: “But we also know – from past experience - that early action is often needed when dealing with this virus. In fact acting early, is often the best way of acting proportionately. So we can’t rule out further measures.”

She said a "significant strain" will also be put on the economy given the number of people who would be required to self-isolate as a result of the transmissibility of the new variant.

The Night Time Industries Association Scotland said that its members had invested in enhanced ventilation in their venues and had put in place rigorous hygiene protocols in a bid to remain open for the festive season.

A spokesman said: “All of this has come at a heavy cost, with Scottish businesses accruing double the accumulated harm from the pandemic compared to English businesses, suffering twice the reduction in turnover compared to our English counterparts, and also carrying over twice the debt burden, as a result of Scotland's tougher restrictions over the last 18 months.

“It will now be impossible for affected businesses to survive until spring without further and substantial government financial support."

Gavin Stevenson, Vice-Chair of the Night Time Industries Association Scotland added: “Our sector has now seen an avalanche of cancellations come in last night and this morning, resulting in a threat to the very viability of hospitality and the late night economy across Scotland. Government must now provide urgent financial support to prevent business failures and protect jobs.”

Jim Rowan, managing director of Dunns Food & Drink, a supplier to Scotland’s hospitality businesses, added: “Whilst acknowledging the significance of the threat to public health from the Omicron variant, the First Minister’s announcement today signals another catastrophic blow to hospitality in Scotland. Without financial support, the industry simply cannot afford a return to significant lockdown measures, and we wait nervously to see what is to come. We are already seeing orders beginning to dip and expect to see this continue over the next week.”

Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said the latest moves would have a “major impact”.

“Financial compensation to mitigate the fallout from this intervention must be made available immediately to businesses. We cannot see a repeat of March 2020 where the hospitality sector was essentially closed down without any financial support being put in place until weeks after the lockdown decision. That cannot be allowed to happen again.”

She added: “Scotland’s vaccine rollout is leading the UK and we urge everyone that can to get the vaccine and boosters when eligible. Businesses will continue to do everything at our disposal to prevent the spread of the virus and keep our customers, clients and employees safe.”

Scottish Liberal Democrat leader and health spokesperson Alex Cole-Hamilton urged the First Minister to “choose a clear route” as government messaging around Christmas inflicts disruption and cancellations on businesses with no prospect of new support.

He said: “Hospitality will feel like it is being singled out. Businesses fear cancellation chaos and the prospect of lost income as a result of this confused messaging. But there’s a ripple effect too for retailers, hairdressers, taxi drivers and many more.

He added: “If the suggestion is people should cancel, then the question for government is whether it will provide formal guidance and cover the cost for business pound for pound and drink for drink. The First Minister needs to choose a clear route, otherwise businesses will be left high and dry and without access to support or business interruption insurance.

“After a long hard 2021, with businesses looking to use the festive season to get back some of what they’ve lost, the last thing they need is a government causing confusion.”

Union the TUC called on the UK Government Treasury support to protect jobs, and for the sick pay system to be fixed to reduce spread of Omicron.

TUC General Secretary Frances O’Grady said: “Ministers must reassure workers in hard-hit sectors like hospitality, leisure and travel that their livelihoods are secure.

“Furlough was the great success in the first response to the pandemic. The rise of the Omicron variant shows why the UK needs a permanent short-time working scheme – ready to go when a new crisis hits.

“If we’re serious about stopping Omicron, ministers must fix our broken sick pay system, so every worker gets a decent amount to live off if they are sick or have to self-isolate. That’s how we make sure people can follow the rules and stop the spread.”

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