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UK Hospitality seeks deal to waive rent built up during pandemic

UK Hospitality seeks deal to waive rent built up during pandemic
UK Hospitality seeks deal to waive rent built up during pandemic

Experts have warned that the UK government needs to persuade commercial landlords to waive some of the rent accumulated during the pandemic to prevent possible insolvencies when payments become due in July.

At a recent Treasury select committee hearing, trade body leaders in hospitality, travel, and retail sectors reportedly said that relaxing restrictions was not enough to prevent business failures and employment losses across debt-ridden sectors.

Hospitality and retail businesses alone have jointly amassed a collective £5 billion (~$7 billion) of rent debt, reports suggest. Notably, the moratorium imposed last year to stop commercial landlords from demanding rent arrears is slated to expire on 1st July.

Kate Nicholls, chief executive of UK Hospitality, warned about 1/3rd of the members of the trade body were expecting back-dated rent as soon as the moratorium ends, even if many are still unable to trade. These members collectively have 90,000 venues among them, as per reports.

Nicholls stated that there is a “very real” problem on everybody’s hands in case the government lifts the moratorium without putting a resolution in place. She cautioned that it could be a “long Covid” for the economy if the government is not careful.

Nicholls further added that several trade bodies proposed a scheme wherein the government would broker a deal requiring landlords to forgo up to 50% of pandemic debts, however there was still no clarity about the way forward.

Helen Dickinson, head of the British Retail Consortium, reportedly pointed out that they are about two weeks away from when the deadline could crystallize while underlining the uncertainty of events.

Mark Tanzer, CEO of travel association ABTA, said that the travel industry had been hit even harder, as tourism remains impossible following Portugal’s sudden removal from the “green list” of safe travel destinations.

According to reports, Tanzer also outlined necessary measures, such as granting support for the travel industry, indicating similar schemes in France and the Netherlands that have nearly doubled their revenues.

Evidently, Tanzer also requested a “step change” in the government’s stance on travel and warned about Britain’s risk of “losing a generation” of travel companies if they fail to act.

Source credits: https://www.theguardian.com/business/2021/jun/07/uk-hospitality-calls-for-deal-with-landlords-to-forgo-rent-built-up-due-to-covid-restrictions

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.