“The sector is turning a corner” Paul Askew looks at the year ahead for the hospitality industry
1 year ago
The hospitality industry in Liverpool is showing signs of recovery.
January has been a busy month and bookings are going up throughout February and March and into spring.
Paul Askew, Chef Patron of The Art School and one of a collective of chefs behind new venture Barnacle, comments on how 2022 is shaping up for the sector.
“December was a terrible period for hospitality, a really brutal few weeks of cancellations and customer confidence all but gone. But thankfully brief too, despite the huge turnover the sector would have expected to have in the festive period.
“But remarkably, since the start of the year we have seen bookings shoot back up at The Art School and Barnacle. January has been really busy, and we have got strong bookings into February and beyond. Already it feels as though confidence is rushing back post New Year.
“There are still critical issues facing the industry though.
“We have been asking for a permanent 15% VAT rate for hospitality. Having VAT reduced throughout the pandemic provided us all with a cushion, and now that is been taken away bit by bit. By the end of March it will be back to 20%. VAT at this level is onerous for hospitality – raw ingredients don’t have VAT, yet a cooked meal does, so as a business you are always in deficit.
“Pre-pandemic many independent businesses like ours operate on fine margins anyway, and I can see that situation returning now, especially with VAT going up. The chancellor needs to fix the rate lower. It’s partly why so many new independent restaurants don’t last longer than 2 years. The odds are stacked against them.
“With business rates, the entire system needs reforming. As bad as the pandemic has been, it’s also an opportunity to reform and re-set this model. As a business, we pay so many different rates – everyone does. Yet for what? Where does the money go?
“Opening a restaurant now, in this climate, this year, will still be tough. With Barnacle, our new venture in Liverpool, the model is almost like shared ownership with the overall venue, Duke Street Market. It’s a much better way of launching a new restaurant than a brand new site with all of the additional costs and stresses. And so far it has been a great success story in the city.
“The most important thing is that we are seeing an improvement happening right now, the sector is turning a corner – people want to go out and eat, they have just been put off and restricted by Omicron. That is now changing. We are already getting back to the kind of booking levels we had pre-pandemic. There are still many challenges to navigate, but we feel confident 2022 is going to be the year the hospitality sector recovers.”