Good operators always shine through – Opportunities are available when there are tough trading conditions

We are in difficult trading times for the hospitality industry. Following the national (and international) lockdown due to the covid-19 pandemic lifestyle habits have changed. This varies from workers not going into offices, through to regular diners choosing to stay at home rather than be in busy social environments, through to a reduction in those who travel as part of their job and stay overnight in hotels. All of these changes mean a reduction in the available market for many sectors of the hospitality industry.

On the back of these lifestyle changes, and in part because of them, we are in a time of increasing lifestyle costs for individuals, and operating costs for businesses. It would appear the outlook is gloomy for all.

However, in difficult times where businesses fail there are opportunities for those who can identify trends, manage costs, and target those areas where there is the potential for  growth. This is not easy to do and can take up a great deal of time. Many operators in the hospitality industry that try to spread themselves too thinly, or have additional employment to make ends meet, may find that forgetting the planning stages of their business can be mortally wounding. Traditionally the hospitality industry was the sole focus of those involved in the day to day running of a business, but the trend to look at a pub or guest house as a way of topping up on other employment became fashionable in the early 2000’s when property prices and profitability in these sectors rose with the need for little additional input. Focus must now be 100% on making a business a success.

The formula for success in the hospitality industry is not rocket science, but it is pretty close and it needs dedication, thorough and ongoing planning, hard work and long hours. Not putting the work in means reduced turnover, but the costs are still there. These costs are rising so that means less operating profit. 

2023 sees my 37th year in the hospitality business. There have been many peaks and troughs for the industry during that time since 1985. However, one constant has remained. Operators who understand trends, control the gross profit and costs in their business, and plan ahead, continue to have a successful business. There is always something to do. Plan when it is quiet and make hay when the sun shines.

At MJD HUGHES Ltd we are always talking to property owners and landlords who have opportunities for those who can operate a business. Our job is putting the two sides together. Our business is the hospitality business, and keeping it going. We don’t believe that good businesses should close. Email us today at info@mjdhughes.com if you are interested in running a pub, guest house, restaurant, hotel or have an idea for a property that may just be ahead of the game. We would love to hear from you and marry you up with the property that will help you realise your potential.

Covid-related legal protections for Commercial Tenants in arrears of rent in England

Landlords of commercial property in England face further extensions to temporary laws that protect their commercial tenants from specified legal actions against them to recover rent arrears – and a new and unexpected ringfencing and arbitration procedure.

First, the temporary moratorium against forfeiture of a lease for non-payment of rent has been extended by nine months, until 25 March 2022. Under the moratorium, commercial landlords cannot forfeit a business tenancy for non-payment of rent if the non-payment is due to COVID-19.

The government has also extended the temporary restriction stopping landlords from bringing Commercial Rent Arrears Recovery (CRAR) proceedings against commercial tenants in arrears, until 25 March 2022. When they apply, CRAR proceedings permit landlords to give a notice to pay to tenants whose arrears have reached a certain level. If the tenant does not comply, the landlord can seize the tenant’s assets and sell them at auction.

Third, the temporary prohibition stopping landlords from using statutory demands against commercial tenants who are in arrears of rent because of COVID-19 has also been extended again, to 30 September 2021. Ordinarily, if a landlord serves a statutory demand for arrears and the tenant fails to pay within 21 days, the landlord becomes entitled to petition the court to have the tenant wound up.

In addition, and unexpectedly, the government has said it intends to bring in new laws that will ‘ringfence’ arrears of rent that have built up during the pandemic. Once COVID-19 restrictions are lifted, landlords will need to make allowance for them and share their impact – for example, by making an agreement with their tenant to waive part of that amount, or accepting a long-term repayment schedule.

If they fail to reach such an agreement, an automatic, legally binding arbitration procedure will apply, presided over by approved private arbitrators. No detail has yet been given as to the approval criteria for arbitrators, or which factors they will take into account when deciding whether, when and how a landlord will be allowed to recover all or any of the outstanding rent.

This appears to go against the previous government approach, which was that unpaid rent during the pandemic would become payable in full after the pandemic ended.

Kirsty Jackson, Head of Commercial Property at Ramsdens commented: “Commercial landlords should review their budgets and processes, and consider whether to take specialist advice, as a result of the further extensions and particularly the proposed new ringfencing and arbitration process.”

 

Pubs and restaurants reopening 4th July 2020 – Government Advice

England only! Northern Ireland will be implementing a re-opening in early July with Scotland and Wales yet to confirm dates.

Information relating to the reopening of Pubs, restaurants and other sectors of the hospitality industry can be found at the following link:

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/restaurants-offering-takeaway-or-delivery?

If you are a pub or restaurant operator and have any specific questions relating to your own circumstances please contact us directly at info@mjdhughes.com