How government policy can help the hospitality sector to recover from Covid-19

By Tom O’Byrne

The latest worldwide lockdown has left the world’s hospitality sector in dire straits once again. Despite this, governments can now rethink how they get this vital industry back on its feet with the ongoing rollout of the vaccine, after their failure to do so in the past year.

In the fight against the pandemic, the hospitality sector has borne the brunt of restrictions, punished for its supposed role as the main spreader of Covid-19. However, new international evidence has made governments and the public question if this was really the case.

The answer is quite simply, no. We now know that the vast majority of Covid-19 infections originate in private spheres such as household visits or in clusters such as nursing homes. According to a Public Health England (PHE) study, the hospitality sector was responsible for less than 3% of Covid-19 infections. That being said, the development of dangerous new variants means that all sectors have to double their efforts to make indoor settings safe, and this has particular relevance in the hospitality sector.

While states have provided some financial support to the sector so far, it has not been enough to stop bars, hotels and restaurants from closing their doors permanently. Instead of implementing evidence-based policy with a view to allowing for an eventual safe re-opening, governments have scapegoated the hospitality sector, imposing disproportionate financial costs on an industry that has contributed little to the overall problem of transmission.

And it was working people who were impacted the most by these restrictions. The damage inflicted has been stark. Pubs, bars, restaurants and hotels in Britain, for example, lost nearly £200 million a day in 2020, which in turn inflicted further damage on the broader economy.

The importance of the hospitality sector is demonstrated by the consequences of its closure. In Ireland, 53% of businesses were in decline as of last summer, and thousands of businesses have ‘gone bust’ since the initial lockdown.

Now is the time for governments to extend VAT cuts, reduce excise taxes and provide furlough schemes for businesses. This will allow economies to rebuild from the ground up, allowing businesses to rehire lost staff and helping to refill the government’s depleted coffers.

Furthermore, there are numerous practical measures that need to be adopted in the coming months to ensure that a safe and successful reopening can take place in 2021. One such measure is investing in ventilation systems, as some governments around the world are already doing to help protect workers and customers.

Germany has allocated €500 million to improving ventilation in public buildings through grants for upgrading air conditioning systems and purchasing CO2 sensors, while in Madrid, the local government has been assessing the effectiveness of CO2 readers in the hospitality sector.

Steps like this need to become the norm, and the provision of mandatory training and a continuous supply of PPE for staff would also provide ongoing support to struggling businesses and reduce concerns of another possible spike in infections.

The lockdown is a stark reminder that good governance is dictated by good policymaking. Continued restrictions won’t bring back jobs or reopen businesses, so world leaders now need to look ahead to building a framework that protects jobs, businesses and the broader public as well.