UK, USA, Germany: Hospitality industry latest to open after shutdown

As the COVID-19 pandemic has seemingly passed its peak in many countries in Asia, Europe and America, officials started cautiously in the last days to loosen measures in an effort to return to normal life. Little shops are often the first to open up again under strict distancing rules, followed by schools, arcades, gyms and beauty parlors. Pubs, bars and restaurants together with cinemas and other entertainment facilities are the latest to open again after the COVID-19 shutdown as they are not considered system-relevant. In addition, the sale of alcohol is either totally or partly forbidden in some countries to promote social distancing.

This, however, endangers not only millions of small family run businesses, as restaurants are often run privately, but also affects mainly craft breweries and boutique wine producers which earn their living by selling their products to those outlets. Since larger brewing groups have a better access to supermarkets and other retail outlets, their share of draft beer and therefore their dependence on the sale in pubs and restaurants is usually smaller. The resurgence of craft breweries in the last decades often came together with a resurgence of tap houses and beer bars which are now the most affected by the shutdown.

If governments are not willing to accept bankruptcy of millions of craft breweries, pubs and restaurants which will be in most cases lost forever, they need to support them. Industry organizations around the world are now pledging for financial support for the industry.

"Our establishments were the first to be closed and are now the last to be allowed to open again," explains Guido Zöllick, President of the German Hotel and Restaurant Association (DEHOGA). Zöllick emphasizes that the hospitality industry accepts everything that is required in terms of health policy. However, the measures should be understandable and justified. "It is now all the more important to have an immediate rescue package for the industry, as we have called for from the start," says Zöllick. This was the only way to prevent an unprecedented wave of bankruptcy and mass unemployment.

The closing of pubs is unprecedented also for Britain. Through two world wars, Britain’s pubs stayed open. “I do accept that what we’re doing is extraordinary. We’re taking away the ancient, inalienable right of freeborn people of the United Kingdom to go to the pub,” UK’s Prime Minister Boris Johnson said when he announced the closures of all pubs, restaurants, bars and cafes on March 20.

The hospitality industry supports 4.5million jobs and contributes GBP 130billion (USD 159bn) to the British economy each year – more than the aviation, car and pharmaceutical sectors combined. "If nothing is done, we are talking about 50% of these businesses going under, and two million jobs will be lost. The impact of all those millions of people losing their jobs would be catastrophic for human lives, and equally catastrophic for the economy," says Thomasina Miers, an English cook, writer and television presenter who co-founded the Wahaca chain of Mexican street food restaurants.

She has joined forces with 12 chief executives from high street brands including Burger King, TGI Fridays and pub chain Fuller's to ask for a stronger financial support of the sector from government.

Equally in the US the accommodation, leisure and hospitality sector was among the hardest hit by measures to contain the coronavirus outbreak. The U.S. Labor Department reported that payrolls in May plunged by 701,000, marking the worst fall since March 2009. “About two-thirds of the drop occurred in leisure and hospitality, mainly in food services and drinking places,” the agency reported. However, the report fails to capture the full damage from the coronavirus so far because the Bureau of Labor Statistics used as its reference period the week ended March 12, where the strict measures just started.

Laurent Grandet, an analyst at investment banker Guggenheim estimates that despite the aid offered by the CARES act (, 30.3.2020), 20% of all bars and restaurants will not reopen.

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