Like the meteor that killed the dinosaurs - Covid and the North's local restrictions have had an extinction level impact on the region's hospitality sector.
The sector in Newcastle has been decimated by the current measures and what will survive this crisis is uncertain. Viable businesses were brought to their knees in the first four weeks of local lockdown with no end in sight for the lifting of restrictions. And now we face the new 3-Tier alert system and the prospect of further measures being imposed in the North to halt the spread of the virus.
The impact on the North East has been catastrophic and threatens not only individual businesses but strikes at the very heart of Newcastle. Throughout the pandemic we have been calling on the Government for greater support for Newcastle and the North East most recently arguing that central Government cannot impose such draconian restrictions on local businesses without offering immediate and sector specific financial support.
The latest announcements about further restrictions on the hospitality sector have been met by utter despair from businesses who are starting to question the veracity of the lockdown measures and on what basis the lockdown is happening.
Having just reopened and beginning to make progress many businesses feel the latest restrictions have pulled the rug from under them with no timescale for when the lockdown might be lifted. Although the North East avoided the toughest restrictions in the new tiered system, the warning has been issued that without a radical reduction in Covid cases, Tier 3 could be coming our way in weeks.
NE1 represents businesses in all industry sectors, all of which will be affected by the restrictions both directly and indirectly. Newcastle is famed for its nightlife. The nighttime economy generates £340 million per annum and employs 7,000 but it does not operate in isolation. Without these venues and the vibrancy and cultural richness they bring, what we know and love about Newcastle is under serious and imminent threat.
Without immediate financial support, we are seriously worried about what will be left when we do eventually come through this and what impact it will have on our universities, the businesses who choose to invest, grow and re-locate here and all other sectors of our economy.
When local lockdown restrictions were first imposed a survey of Newcastle’s hospitality sector showed the impact was immediate. Operators reported an average drop in trade of 69% in the first weekend alone, even before the one household rule became law and the tighter restrictions were imposed. Many businesses now have only very limited room for manoeuvre and are fast running out of options. Restrict trading and businesses, unable to generate cashflow, are caught between a rock and a hard place. Understandably many in the hospitality sector feel abandoned; nightclubs and live music venues can’t open and, for many, the support available doesn’t match the cost of rent, insurance and other repayments. These businesses need to trade – they want to trade! With 7,000 employed in hospitality and over 10,000 in retail, we need to protect these jobs or else see unemployment spike in Newcastle city centre when furlough ends.
As we battle infection rates and navigate the new tiered restrictions it is essential for businesses to have certainty. They need clear guidance and to know when and how we can navigate our way out of the local lockdowns. The current situation is unsustainable and needs comprehensive, localised and targeted support if businesses have a hope of making it through.
The Government needs to provide a clear plan, a timescale for recovery and targeted and sector specific financial support, both now and into 2021. Newcastle is a great city with so much going for it. We know it will survive and prosper but decisions the Government makes now will determine the scale of the fallout, the number of jobs lost and how long it will take for us to regain lost ground.
And at the risk of sounding insensitive there are, even amongst all the angst and bad news, sound reasons for optimism in Newcastle with significant investment in the pipeline for the city. We can expect to see new office buildings, more city centre residential development and rejuvenated public spaces in the near future which is all great news but more immediately we need our talented and creative hospitality sector to survive the winter. We desperately need them to be given the wherewithal to help them fight on until Spring when we hope we will be through the worst of the Covid crisis and then the city’s great venues will again be able to do what they do best – entertain and look after us, providing great experiences and a brilliant night out.
