Temporary VAT Reduction
Although the COVID-19 pandemic has impacted virtually everyone around the world and all businesses in some shape or form, it has been widely documented that Hospitality has been impacted more than most.
On 23rd March 2020, we were forced to close all our Iconic properties for 15 weeks and during that time with no revenue coming in and with property and business expenses still being incurred we suffered significant losses. Clearly the Furlough scheme was a lifeline, which has allowed us to protect hundreds of jobs throughout the lockdown however the legacy of this fallow period is likely to impact us well into 2021.
Thankfully all our Hotels are now reopen and although our provincial properties are benefiting from the ‘staycation’ trend, as a whole we are still operating well below normal trading levels due to social distancing requirements in our Bars, Restaurants and Spas. The Meetings, Events and Weddings business, which is ordinarily an important part of our business mix, is yet to be allowed to recommence fully and Overseas Business is non-existent due to quarantine measures and lack of consumer confidence.
When the UK Government communicated a VAT cut for hospitality in mid-July, The Chancellor was adamant that this initiative was being introduced to protect hospitality businesses not to stimulate consumer demand. Unsure of what our position should be, we consulted at length with fellow hoteliers and with the wider industry and collectively decided that with the prospect of losses still to cover, reduced capacities, weak demand from certain markets and abnormally high operating expenses for the foreseeable future, we would not be passing the VAT reduction onto our guests. Ultimately the rates we communicate are inclusive of VAT and therefore the rates charged and paid remain unchanged.
I fully appreciate that for a tiny minority of our guests, this decision may be deemed as controversial however as Executive Director of Iconic Luxury Hotels my main priorities are to support our team, protect the business and ensure that our hotels, restaurants and spas continue to provide magical and memorable experiences for our loyal guests.
This is also a unique opportunity to support Hospitality Action https://www.hospitalityaction.org.uk/ our industry charity who support current or previous hospitality workers in their time of need. As you would imagine the demand on their limited resources has never been greater in their 183-year history. They have always been one of our nominated charities however it is essential that we do more to help them just now by increasing our donations.
Thank you for your understanding and for your ongoing support, which we will never take for granted.