Navigating the leisure and tourism industry through the current crisis
In these unprecedented times businesses are facing significant difficulties and uncertainties, perhaps none more so than the leisure and tourism sector. Here Cowgills Business Recovery partner and insolvency practitioner Craig Johns explains how early intervention can ensure the best outcome.
With all pubs and restaurants still forcibly closed, and trips both domestic and abroad having been cancelled, businesses in this industry are in a situation where they have no income for the foreseeable future.
Whilst the government support offers considerable assistance, owners in the licensed and hospitality trade in particular still have to manage the costs of landlords and staff, even with the assistance of the furlough scheme.
At a time where flexibility and patience are paramount from creditors, including landlords, with no certainty as to when these businesses can begin to operate again, the future is difficult to predict.
Even as we continue on the path to ease out of “lock down”, it is unlikely that these businesses will be able to become fully functional overnight, perhaps being allowed to operate at reduced capacity. This in itself presents further issues for consideration for these business owners, such as can the significant operating costs be met when operating on such reduced numbers? If this is not the case, we may see that businesses of this nature do not re-open even as we navigate through the other side of lockdown.
In respect of the tourism industry, it was this week announced that the Shearings Group has had no alternative but to enter into Administration. With all trips cancelled, the business has been severely impacted, which has resulted in significant cash flow issues. In the absence of a buyer for the Group, it is now being wound down by its Administrators.
This is very sad news for such a local and well-established business to have been impacted so significantly by the Covid-19 pandemic.
Due to the ongoing uncertainty, and the fact that similar businesses are likely to be subject to lockdown for the longest period, and the most stringent requirements thereafter, it is feared that this sector may be hit the hardest as the pandemic continues to unfold.
However, speaking to an insolvency practitioner does not have to mean it’s the end! Craig explains:
“Being brought into the situation at the earliest possible stage is crucial to secure a positive result. With sufficient time to fully understand the issues the business is facing, and the negative implications should the business fail, enables us to put in place a full strategy ensuring that all options can be explored and the chances of rescue maximised.”
If you have concerns about your business, please do not hesitate to contact Craig or a member of our Business Recovery team, who will be able to assist with an initial free consultation.
The information was correct at time of publishing but may now be out of date.