Image credit: Sam Mar via Unsplash.
The coronavirus pandemic has been affecting our lives for over a year now and life seems to be heading closer to normality, but what has been the impact for the businesses left behind? The nightlife industry has been severely affected by the pandemic as it was unable to open for the last 15 months.
The economic impact
The obvious impact has been economic. The uncertainty of lockdowns and particularly the hope of 21st June has led to nightclubs losing out on much more than profit. The Independent cited that more than half of nightlife businesses spent more than £15,000 preparing for the reopening on the 21st June, so the delay has been a further financial hit as, in some cases, businesses did not have that money to spend and had to find financial aid, such as loans.
Also, nightclubs have already lost much of their revenue and are likely to lose even more. A flash poll carried out by the Night Time Industries Association (NTIA) found that one in five businesses estimate they will lose more than £40,000 per week in revenue due to the delay. For a business that has already lost a year's worth of income this is a huge loss.
On top of this, the losses in terms of preparation for the 21st June will also be huge. According to the NTIA, 54% of businesses ordered stock, 73% called in staff and 60% sold advance tickets. The potential of stock to go to waste and staff being taken off of furlough could lead to further losses than those predicted.
The hospitality industry in general is going through an employment crisis at the moment in which they are losing employees and cannot hire new employees quick enough to replace them. Figures suggest more than one in ten UK hospitality workers left the industry in the last year.
Should this pattern continue, as the NTIA predicts, more than a third of businesses estimate they will lose over 30% of their workforce, there may be even further losses with businesses not being able to operate normally.
The mental health of workers who have been on furlough for the most part of a year has also been thrown into question. According to online training platform High Speed Training, which commissioned the research, 73% of hospitality workers reported suffering a mental health concern over the past year. 35% of respondents said this was due to their work. This has likely had some impact on the number of people leaving the hospitality sector.
Richard Wynn, the founder of London cocktail bar Callooh Callay, focussed on the potential public response to the nightlife industry following the delay. The statement read: “Our main feeling is concern that this will hugely impact consumer confidence in the hospitality industry.
We're all spending a lot of time and money making sure our venues are safe and up to pristine standards. Each set back just heightens fears of our customers, understandably. It's unbelievably frustrating.”
The public perception of the hospitality industry has been shaped by government rules which suggest that the hospitality industry is more dangerous than others. This has the potential to fuel public fear as touched on by Richard and therefore cause more harm to the industry.
The necessity of delay?
People in affected industries have raised questions over the necessity of delay. They suggest that with the elderly and vulnerable having all been offered a vaccine, there is no reason for so-called ‘freedom day’ to be pushed back. Government figures suggest that as of 23rd June, 43,448,680 adults had received their first dose of the vaccine, while 31,740,115 had received their second.
The government argues that the Delta variant has thrown up these issues as, though it is clear that vaccines are effective against this variant, there isn’t the level of herd immunity needed to avoid the NHS becoming overwhelmed. Though we have not yet seen an astronomical rise in deaths, there has been a slight rise in hospitalisation and, for the first time in the pandemic, under 65s are more likely to be hospitalised than over 65s. This is due to the efficacy of the vaccine and, therefore, the government argues that we must vaccinate the younger populations to avoid further rises.
It has also been emphasised that transitions to normality should be “irreversible” and therefore the government does not want to risk a further lockdown.
The effect of the delay
This will without a doubt be a massive hit on the already stricken down nightclub industry. With Rishi Sunak announcing cuts to the furlough scheme including the requirement for businesses to contribute to furlough pay, it will be challenging to hold onto staff who have already been out of work for over a year.
The delay to the restrictions, though arguably necessary, will have a huge impact on nightime industries. Only time will tell how big the impact will be.
Nightclubs are now due to open on the 19th July, in what Johnson calls an “irreversible” road map to freedom.