Covid debts, higher bills, staff departures: How badly has the pandemic hit hospitality in Wales?

  • Written by ITV Wales Journalist Zaynub Akbar

The last two years of repeated restrictions has affected a range of hospitality businesses, including pubs, hotels and restaurants, in a number of ways.

As part of our Wales This Week series, we speak to Welsh businesses about their experiences; some of whom have decided to close for good and others that are trying to get back on their feet.

In addition to paying off Covid-related loans, business owners are also facing the pressures of rising energy bills, higher food and beer costs, all whilst trying to retain and recruit staff.

For Sam and Shauna, it was staffing problems which led to the closure of their popular Barry restaurant, despite a fully booked guest card most nights.

"When we asked our senior chef team to come back off the furlough five of them didn’t. And those five chefs didn’t just leave Hang Fire, like Sam said, they left the industry.

"You’ll never attract those people back."

Sam and Shuana decided to close their popular Barry restaurant, Hang Fire, during the pandemic. Credit: ITV Cymru Wales

The challenge to recruit and train new staff was a difficult one for Sam and it soon began to take its toll.

Sam explained: "Front of house was fine, but to train a chef who’s never seen the kind of food we produce before takes round about two years. And so I ended up with almost a 90% fresh team trying to train them into a fully booked restaurant.

"So my mental health was slowly going down the sink. I know it’s a cliche, but that plate spinning was just epitomised by how we were trying to run the business."

"It became quite a disheartening process to something that I am hugely passionate about, so I think for us it was white flag time", Sam added.

As well as original staff departures giving the pair a chance to reflect, it was time to make a decision.

Shauna said: "It’s the hardest decision I've ever made, because walking away from something that was hugely successful, that we had given blood, sweat and tears  into, we’d given it everything. To have to walk away from that, it was devastating."

Hotels are another branch of hospitality which have heavily felt the effects of Covid across Wales.

The Imperial Hotel, one of the largest in Llandudno, has lost more than £4.5 million in revenue since the start of the pandemic.

General Manager, Geoff Lofthouse, explained how the hotel's energy bills have more than tripled.

"Our electricity bill has increased. It’s normally around £8,000 a month. In November, our electricity bill was over £16,000 and December it was just over £25,000."

However, similar to Hang Fire, it's staffing issues which are the biggest concern for The Imperial.

Geoff said: "The number of staff in the market place has reduced dramatically what with Brexit and people finding other jobs, which give them a better work life balance.

"We’ve addressed this, or tried to address this, by contractually putting virtually all the staff onto a 40 hour week, rather than historically people have been on a 45 hour week, chefs and the like. 

"We’ve reviewed our rates of pay across the board. Making it more attractive with enhanced rates of pay and benefits."

Another hospitality business still running and with a big community focus is the Lion in Treorchy.

However the pub's landlord, Adrian Emmett, believes the next year will be one of the most challenging for the industry.

"It's going to be a very, very tough year. I think if people thought the last few years were tough, now is the test, because we’ve got to start paying all of these loans back. With rising energy costs, minimum wages goes up again in April, you know the price of beer, the price of food, everything's going up."

As well as trying to get back on its feet, the pub needs to make even more money to keep up with bills and repayments.

Reflecting on Covid and its consequences, Adrian described the whole experience as "horrendous".

"I don’t think I’m unique in that I think all businesses are the same, but I think pubs have particularly been hit.

"The Government grants have been welcomed and the furlough and I don’t think most businesses would have been here if it wasn’t for that, but it didn’t touch the sides really. 

"You work so hard to build a business up as a small business owner, thinking that you could actually lose all that from no fault of your own was incredibly difficult."

Despite the difficulties that lie ahead, Adrian credits the spirit of the surrounding community.

"I’ve never seen the local community want to support local businesses as much as they do now. We’re a fantastic community, but even more so now. Coming out of covid, they all want to support the high street. Local businesses. So I think we’ll be fine going forward, but it's going to be a you know, we need to steady the ship."

Economy Minister, Vaughan Gething, said decision-making has been "really challenging" and added: "We’ve never been in a position to make up every single loss and reduction in revenue and profit".

A view echoed by the Federation of Small Businesses, Ben Cottam said it's proving "very, very difficult for the industry to recover from Covid".

"Certainly, Covid has dealt hospitality a very particular blow when you look at the impact overall on different sectors of the Welsh economy.

"What we see now is businesses across the small business spectrum, but particularly in these industries that have been repeatedly hit, they’re heavily leveraged, they’re heavily indebted and that has a cumulative effect".

Looking ahead to the future, Ben believes encouraging young people in particular into the industry is essential, as well as appreciating the importance of hospitality in our daily lives.

"I think as long as we recognise the value of the industry to the Welsh economy, I think there’ll be any number of entrepreneurs who are willing to provide that service and be innovative."

In response to the pressures hospitality businesses across Wales have and continue to face, Economy Minister Vaughan Gething compared the situation to "a game of four dimensional chess".

He explained: "Moving one piece in one direction has a direct impact on somewhere else and that's actually made decision-making really challenging.

"We’ve provided a range of support in the pandemic, so it shows that we can provide support where it’s needed, but the difficulty is the means to do so. 

"There isn’t lots and lots of money left in the kitty to do this. So if we get to the point where we need to do more to support businesses, of course we’ll look within the Government and my department in particular about what we can do" the Economy Minister added.

To watch the full Wales This Week programme, which explores how the hospitality industry has been impacted and its future, tune into ITV Wales at 7:30pm Tuesday 22nd February.