Large hotel chains may just about stand a chance of surviving the ongoing global pandemic, but concerns have been raised over the future of smaller, independent B&Bs and guest houses who simply don’t have the cash reserves in place to weather the storm.
B&Bs have been a staple part of life for both leisure and business customers. My husband is a contractor and spends most of his time working at various locations across the country. Usually, his employer puts him up in a B&B, as this tends to be much more cost effective than a hotel room. We’ve also used B&Bs when travelling around on family holidays, again because of the lower cost and more personalized service. These B&Bs are often independently run and are the only income for those running the business. I know of many situations where this business is a ‘retirement choice’ for couples who have given up their previous careers and lives and are now running a B&B as more of a lifestyle business. The rising prevalence of Airbnb now means that you don’t have to buy a 12-bedroom property in order to offer a B&B service, some have just one or two rooms that form part of their residential property.
Up until the start of 2020, this B&B market appeared to be booming and many people were realizing the benefits of renting out a spare room to people who are visiting the area temporarily for leisure or for business. However, the restrictions imposed by the coronavirus pandemic have led many to put a stop to their B&B offering, or at least drastically reduce their services.
Generally travel has decreased dramatically since COVID-19 hit and following a six month period of lockdown restrictions over the summer in the U.K., the market started to reopen in late August and September. However, with a new national lockdown announced before the industry had really managed to get back on its feet, there are real concerns that smaller, independent B&Bs simply may not be able to survive.
Arguably, those who have been offering the service from within their own homes may be slightly more resilient, in that their overheads aren’t dramatically different if they are not welcoming customers in to stay. That said, if they were relying on this business to support their income, contribute towards the rent or to help pay bills, then the loss of custom could lead to financial difficulty. If they weren’t running the operation as a bonafide business entity within itself, then they will be very little help they can claim from the government. Although, they could potentially switch from offering temporary accommodation to a more permanent arrangement, such as becoming a live-in landlord. There are still contractors who are working Monday to Friday in a different location and may require ongoing accommodation for a set number of days of week for a few months. This again could help to plug the gap whilst the country remains in national lockdown.
The bigger concern is for those who are currently managing larger B&B properties, which typically tend to be in locations which are frequented by tourists and holidaymakers. The downturn in tourism which has been a natural output of the pandemic and various restrictions on travel have already impacted footfall and income, so a full national lockdown could just be the nail in the coffin for some struggling B&B operators.
One B&B owner in Weymouth revealed that they had lost over £2,000 worth of bookings in November alone after having to cancel all of the month’s bookings following the government’s new lockdown announcement. Unable to qualify for any of the government funding, the owner explained that they may now have to remain closed until the new year.
Mortgage payment holidays have been extended by a further six months, but this may not be enough to soften the blow. Sadly, some B&B owners may have no option to but to put their businesses and properties on the market. Depending on the urgency to sell, they may also end up getting less than the optimal price for their property too.
There is growing pressure from the B&B and guest house industry to provide more financial support following this second national lockdown. With the furlough payment scheme now extended until March 2021 and a further self-employed payment available for the period November 2020-January 2021, it is clear that further financial support is needed to help the hospitality sector to survive this additional blow. The future for the hospitality and leisure sector is unknown and it is likely to take most of 2021 to recover. Unfortunately, without financial help there are likely to be a great many B&Bs and guest houses that simply won’t be able to survive in the months ahead.