As many of you will know the Chancellor recently announced a measure of assistance to help the hospitality sector. From 15th July he has reduced the amount of VAT we will have to pay on our inclusive prices over the next 6 months.

Rishi Sunak noted that ‘These changes are being brought in as an urgent response to the coronavirus (COVID-19) pandemic to support businesses severely affected by forced closures and social distancing measures.’

We have carefully considered what this means for us. There has been some speculation as to how each business will use their cut in VAT to the best benefit to support their individual situation. Some may choose to use this VAT cut to reduce prices to stimulate demand for their business….that is their prerogative but it is far from mandatory. The chancellors intention was definitely not to enable everyone to have a cheaper holiday.

Overwhelmingly the hotel sector has decided the most prudent use of this reduction in our VAT bill, is to use it to reduce its tax burden on our businesses over the next 6 months following 100 plus days of zero income.

In order to survive, our industry must urgently attempt to get onto a more stable footing, rather than the precarious situation we all currently find ourselves in.

As far as our business is concerned - we did receive some help from the government in the form of their furlough scheme and had some 800 team members benefiting from that, however, that’s only part of the story. We chose to provide added support to a good number of additional team members, who for one reason or other fell through the cracks of government support.

I am proud that the jobs of every single member of the team that existed at the closure in March, have been secured for them and unlike many businesses, not a single person has been made redundant. Our team’s livelihoods rest in my hands and I now need to make the correct decisions to ensure that we can continue to provide secure employment for them through this next very difficult period, my absolute priority is to them.

We have now opened up all of our hotels, but as you know we are operating with strict government measures to keep everyone safe, these involve considerable additional costs and due to distancing, we cannot run at anything close to our usual capacity, all very challenging to the economics of running hotels like ours. Furthermore we continue to fear future changes in customer confidence and the prediction of a second spike in Coronavirus cases looms over us, we are not in the clear yet awhile.

For these reasons above, I can confirm that there will be no changes at the current time to our published rates for hotel accommodation, restaurant or spa prices and there will be no refunds or credits on hotel bills.

I would like to draw your attention to one other related initiative… many hospitality businesses have already announced that they will not reopen, and thousands of people that may have looked after you in the past at other establishments find themselves with no job, we stand together with our less fortunate colleagues. Now more than ever charities such as Hospitality Action ,who offer vital support to all who work, or have worked within hospitality in the UK, and Action Against Hunger, who save the lives of malnourished children, and enable entire communities to be free from hunger, need our support. So whilst we have benefited from this reduction in tax and will hopefully slowly get our businesses back to normal, these charities are in desperate need of funds, so we will be using part of our VAT saving to make a £5 contribution per booking to be split between these two charities. We hope to raise in the order of £100,000 before the end of the year.

With best regards and thank you again for your continued support.

Robin,
CEO and Chairman, THE PIGs