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5 pitfalls for hospitality businesses to avoid when reopening

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As we now find ourselves at Step 2 of the roadmap out of lockdown in England many businesses in the hospitality, holiday accommodation and attractions sectors will either be open or preparing to reopen. With the prospect of a much-needed bumper summer, there is plenty of cause for optimism. However, there are still some key issues to consider and some potential pitfalls to avoid whilst navigating a way back to normality. 

  1. Accommodation providers could boost forward bookings by sharing current VAT savings 

The extension of the reduced VAT rate through to next spring provides an opportunity for business owners to incentivise early payments and bolster forward bookings by sharing some of the VAT saving with guests. However, there is also an argument for sharing all of the VAT savings now. The demand for summer will be there and passing all the savings on could bolster goodwill and reputation in the process and then also attract much-needed custom for the winter months trade, where the demand is less certain. Incentivising forward bookings for 2022 is important, but that should also go hand-in-hand with trying to secure a good winter trade by impressing now. 

  1. Health and safety of staff and customers remains paramount 

Making the most of outdoor space (and come the next phase, indoor space) safely will involve some careful planning. Most businesses will have become accustomed to this throughout the pandemic but it will be important not to lose sight of this when the tills start to ring again. Adhering to the social distancing rules, increased cleaning, minimising contact between staff and customers, additional litter bins and security staff, trained on protocols and provided with PPE, will be key. Ensuring outdoor areas are regularly monitored to avoid groups forming will also be extremely important to stay on the right side of the law. 

  1. Cost control remains key 

Whilst extremely tight cost control has been the order of the day throughout the pandemic, as revenues return, hopefully, in abundance, businesses should not lose sight of the importance of cost discipline. Updating short-term cash flow forecasts and looking at the longer-term position, to understand what additional funding requirements may be needed, and in what form, will also be crucial. A great summer trade and strong forward bookings will be fantastic but businesses will still need to consider the impact of any deferred payments, including VAT and tax liabilities and the end of any arranged payment holidays. The impact of starting repayments on any additional borrowing taken over lockdown will also need to be factored in. 

  1. Agility in the workforce 

Having an agile workforce is a key strength in the current climate. Being able to re-assign people to new roles and tasks is a great opportunity as businesses work to get the right balance and levels in a new world, but it’s also a risk if not balanced carefully. Having people take on new roles and responsibilities without appropriate training and guidance is a risk to service quality, staff and customer safety and, ultimately, reputation.  

  1. Supply and stock levels 

Whilst venues are still operating outdoor services only, and thus dependent on the weather, there is a greater risk of finding yourself being under or overstocked, and hence the potential for loss of opportunity or increased wastage. Suppliers, who have suffered badly throughout the pandemic too, will be doing their utmost to serve their customers well in this period of transition, but it won’t be a return to normality from day one for some and that will need careful consideration when it comes to planning orders. 


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