The crisis our local hospitality businesses are facing has been exposed in a focus group study by The Courier in which more than half said they were not confident they would survive the impact.
Bars, hotels and restaurants have been hit time and again over the last nine months, from the initial lockdown which saw them closed for more than three months to the recently introduced tiers system which has made it impossible for many businesses to trade.
Hospitality business owners and managers from Angus, Dundee, Fife and Perth and Kinross took part in a focus study between November 10 and 30 and the responses show exactly how difficult things are for the sector as it operates under tiered levels of restrictions.
More than half of the 21 business owners (55%) who completed a detailed questionnaire are not confident that they will be able to remain open, despite the extension of the furlough scheme until March next year, while only 9% are completely confident they will still be trading.
And some hospitality venues have been forced to spend eye-watering amounts of money on their premises in order to protect customers.
Some businesses who aired their views have spent between £15,000 and £20,000 (6%) in order to improve safety, with the same number having invested upwards of £20,000.
Turnover down
Unsurprisingly, turnover has been extremely hard hit during lengthy closure periods with 23% of businesses revealing their turnover has been reduced by more than 75%, while 77% of those questioned said they had lost between 25 and 74% of monies.
Owners of hospitality venues also do not believe they have been well supported by the UK Government.
A total of 15% of respondents said support has been “poor”, with 23% revealing that what government has provided has been “very poor”.
Only 7.7% of those questioned believed the support was “very good”.
Regarding support from the Scottish Government, no respondents believed the support to have been “very good”, while 46% said what has been made available is “very poor”.
The furlough scheme has been widely used by businesses with 93% saying they had taken advantage of it during the period from March to October and a total of 83% using the scheme now that it has been extended.
But some have been forced to cut staff, with 8% of respondents revealing they have had to make redundancies, with a similar number saying they expect to lose more employees.
And in a message to government over restrictions, 17% want more advance warning of changes, while 50% believe that there should be more financial support for the sector.
Ancrum Arms – Dundee
Alex Boyle, who owns the Ancrum Arms in Dundee, is confident he will see it through – but only because he is being forced to dip into his own cash to stay afloat.
The Ancrum is currently closed due to Tier 3 restrictions and he pointed out that when bars and pubs are shut, they still have huge outgoings without any money coming in.
“I see me surviving through because I am in a fortunate position as I am digging into my own money because if the business sits the way it’s sitting, or any business is sitting with their own bank account, then it’s getting eaten up pretty fast, especially for the guys who are paying rents and things like that,” Alex said.
“What people don’t seem to get is that when businesses are closed there are still a number of things that need to be paid.
“For instance, we had electrical work done when we were open which was £324, then I had a glazing job which was £90. Your also have your brewer’s bills that still have to be paid, even when we don’t know what’s happening with the stock that’s sitting there. My beer went off on December 1.
“You also have contracts like your telephone and your internet and they still want paid. We are still paying water rates, my accountant has to be paid, we are still getting bank charges, the pub insurance still has to be paid, you need to keep your alarm system going – this is all money going out, but there isn’t a penny coming in.”
Thousands spent
Alex has taken advantage of the furlough scheme and has also had to fork out a couple of thousand pounds on social distancing measures, while rarely seeing any money going into his own bank account.
“My staff are all on furlough, but I can’t get furlough and I haven’t had a penny from the government since March apart from when the pub is open – that is the only time I have had anything. I don’t take a wage as such. I take drawings so that comes off the bottom line,” he revealed.
“We have spent a fair amount on the measures in setting up for the safety in the pub. We are only a small pub and we must have spent near enough £2,000 getting everything set up with the sanitisers and the screens.”
Looking to the future, even with the vaccine on the horizon, Alex believes it could be March before there is a clearer picture for the sector.
“The best case scenario will be January and even going into March. The reason I say that is because they have given the furlough until March and they haven’t done that at the drop of a hat, they don’t expect us to be open until then unless the vaccine kicks in and everyone feels safe to get places open again.”
Simple solution
And he has a message for the people making the decisions – it could have been so much easier, he claims.
“A lot of publicans think they have got this so seriously wrong with the pubs. They could have quite easily got around this by reducing the capacity in the pubs,” he added.
“I don’t know if you know but every pub has a capacity which is permitted. It is kept behind the bar for inspection by licensed standards officers or the police to walk in and ask to have a look at it.
“For safe distancing all they needed to do is come up with a figure of people allowed in that pub. For instance, my number is 134, but we count it as 100 for easy counting. They should say we are not able to let you have that number but you can have 30% which would give us 30 people in the pub, which would probably make it viable for me to trade.
“I was on the Perth Road the other day and I had a look in the cafes and they were absolutely jammed. The wee coffee shops were full. Now, where is the logic in that.
“I’d like to know what government officials drink and what they think goes on in pubs. I’d love to be at one of their parties because they must be really wild! They have no idea what goes on in pubs. Do they not realise that people have a drink and a chat and they are out the door again?”
Concern for patrons
And the Ancrum owner is also concerned for the mental wellbeing of many of their regulars who are missing out on social interaction.
“I have so many people who contact me or I see in the street who are really, really depressed because they are not getting out to have a chat and pint with their mates,” he added.
“Instead of spending the money that they spent on putting it into the industry, they would have been better spending it on enforcement.
“Now I am not putting myself right up at the top there, but there are some pubs in the town that are so good. They were so good at social distancing, when you were going you were getting asked the right questions and seated properly. Where else did they do that? Nowhere!
“I had a conversation with my doctor and told her my pub was safer than her surgery. When you get up from a table in my pub they are all sanitised, waiting on the next customers coming in. That doesn’t happen in the doctor’s surgery and who goes in there? Sick people and unwell people and people with underlying health conditions
“You have a choice whether or not you want to go to the pub. If you are feeling well and healthy enough you can go, if you don’t you shouldn’t be. People need to take some health awareness in my opinion.”
Doc Ferry’s Bar – Broughty Ferry
David Glass, owner of Doc Ferry’s Bar in Broughty Ferry, believes the vaccine will be a game changer, but there won’t be green shoots of recovery for the industry overnight.
“I think it’s always been the target for the vaccine coming in. I don’t think we were really coping otherwise, every idea they threw at us didn’t seem to work,” he said.
“I suppose now the issue is people saying they won’t take the vaccine and I am not sure how that is going to work, but there are already noises being made that you have to prove you have taken the vaccine to get into certain premises which is the only way to do it
“The fact that they are already talking about it being delivered and it is being rolled out before Christmas is a huge thing. Although that won’t make a massive change for the likes of ourselves getting open or anything like that before Christmas or into the New Year, every little step helps.
“The goalposts keep moving weekly which is understandable as everyone is learning, but we wouldn’t be able to open realistically until we are Tier 1. We thought about Tier 2 because we do do food, but profitability is not there to that extent and I just don’t think it would be viable.”
Godsend
David, who is also the chairman of the Dundee Licensed Trade Association, has taken full advantage of the furlough scheme which will be vital until spring he says.
“We are still holding everyone on furlough at the moment which, to be honest, is a Godsend, so to take folk off furlough to get them to come in would cost us, we are probably losing less money being closed. I reckon probably mid-February before things look like they are going to turn,” he continued.
“To be honest, if the two things do marry up (easing of restrictions and end of furlough) then that would be a Godsend for many businesses as we are just hanging in, it’s a waiting game.
“Everyone is just trying to defer everything, any payments they have to pay. Just put everything back until we are earning again and that is the world over, not just in Dundee.”
And he is confident that Doc Ferry’s Bar, a popular watering hole in The Ferry, will still be operating.
“The sums that we have done seem to add up. We have had to take on debt obviously, but things like the bounce back loans have been great and they have already been extended from five years to 10 years for paying back. The percentage for paying back was really attractive and the fact that it has gone from five years to 10 years makes it a little bit easier,” he said.
Cost implications
But there have been huge cost implications of social distancing measures, something he cannot put a figure on but is sure to have run into thousands of pounds.
“There are hidden costs, things that you don’t realise the cost of, for instance how much hand sanitiser costs,” he revealed.
“Obviously setting up one-way systems and a member of staff acting as a greeter if you like to show people to their seats and stuff like that. What we thought was a nightmare when we were open, shutting at 10pm and stuff, we would bite your hand off for that again.
“You would have to add in extra staffing costs as well. It was far more labour intensive when we were open. You were greeting folk at the door, taking them to their table, providing table service. And we were limited in numbers too, I think 41 or 42 was our capacity.”
Hit hard on Saturday
Saturday is the busiest day at Doc Ferry’s and that was when David saw a huge hole in the takings.
Monday to Thursday and Sunday didn’t show great losses and while there was a small loss on Friday, Saturday was where they were really hit.
“Saturday we were walloped,” he continued. “We were 50% down on a Saturday and that was at capacity from 2pm until close.
“There was also an issue, which to be fair everyone understood, where we were turning away what you would call good regulars because, not meaning to sound big headed, but we have more regulars than we could actually cope with the limited number.
“You ended up having to turn away customers who were even phoning up a week in advance to try and book a seat. It felt like a total betrayal.”
