Luke Davis, CEO of IW Capital, and owner of Rockwater, discusses why investment is needed to help hospitality businesses survive the impact of continued lockdown.
Over 300 restaurant groups, led by takeaway giant Deliveroo, have written to the Prime Minister to urge the government to run the Eat Out to Help Out Scheme again once hospitality is allowed to reopen in order to help the struggling sector.
The scheme, run in August of last year, offered 50% off meals in order to encourage wary customers back in to restaurants and pubs, with the Treasury covering the shortfall. August saw increased bookings and revenues compared to earlier in 2020 while on August 3rd bookings were 10% higher than in 2019.
In that period the scheme was used over 100 million times, but many felt that the impact was short-lived, especially given the increased restrictions that quickly followed the incentives.
Luke Davis, CEO of IW Capital and owner of seaside hospitality venue Rockwater: “More practical supports needs to of been offered to the sector. Gimmicky support schemes like Eat Out to Help Out were great at the start, but were never going to be enough. The other measures in this letter will also help but once again delay the problem to another, later, time.
“Hospitality used to qualify for investment under Enterprise Investment Scheme, but unfortunately this was scraped. If EIS was extended to hospitality, we would see a huge increase of investment and private equity into the sector, meaning businesses wouldn’t have to take on more debt to survive, giving them a much larger chance of success in the future.
“People want to get out and spend, businesses want to grow and investors want to help them do that, it’s a perfect storm for rapid growth. Pubs will bounce back along with restaurants and other hospitality, no one will want to stay at home after the year we’ve had and I really believe that. Working with local residents on redeveloping the pub and hospitality venue Rockwater Hove has shown me how much people want, more than ever, a place to come together as a community. What we need now, however, is real support to help the sector get there.”