Open Letter to Guests, Friends, Followers & Colleagues re Hospitality VAT Reduction

16 JULY 2020
IMMEDIATE RELEASE

To all our guests, friends, followers and colleagues,

We know this is rather lengthy, but we ask that you take a couple of minutes and read until the end.

Recently a handful of guests, who reserved accommodation with us prior to the 15% VAT reduction being announced, have returned to query their room rate and / or request a reduction.

Based on this, and the current disparity of reactions within the industry, we felt it necessary to clarify our position and thoughts with regards to the VAT reduction for hospitality.

We are a small, independent hospitality business that was shut down for 106 days. We call ourselves a restaurant with rooms, but could be classed as a very small hotel.
We are first-time business owners, and are still new to the ownership game; we hadn’t even celebrated our 2nd birthday when we were shut down in March.
We have put absolutely everything we have into The Ollerod.

We could write pages about the challenges that we faced in the first 20 months of owning The Ollerod, but that’s not what this is about, and we thankfully overcame and survived them.
Then came Covid. A challenge for most and a trauma for some. An awful virus and a horrible situation.

As you will be well aware hospitality was one of the hardest hit industries.
The government was generous to our staff with the Furlough scheme (for which we are extremely grateful) and we were given business rate relief; however that’s where it ended for us.
The Ollerod was denied both of the grants that were made available to help businesses that had been hardest hit, as we were deemed “too big” (being in a post code that has a high council tax / rateable value). Had we been 10 miles down the road we would have qualified without any question.
Businesses that continued trading throughout the lockdown period, have a higher / equal turnover, employ fewer members of staff, aren’t seasonal and have smaller premises to maintain (as opposed to a 700 year old building), received grants. We could go on at length about this, however this isn’t about the grant scheme (although the process and eligibility criteria were obviously rushed, badly thought out and resulted in a very unfair disbursement).
The only way we have managed to survive and reopen has been with the help of the bounce-back loan, and also loans from our families – all of which will have to be repaid.

This brings me to the VAT reduction; an INCREDIBLE initiative from the government for our industry.
They understood that a lot of us weren’t able to access the grants.
They understood that a lot of us make the bulk of our income from April to September, and were coming out of low season.
They understood that we all reopened with significantly reduced capacity.
They understood that our costs have gone up substantially due to the implementation of Covid-19 guidance procedures.
They understood a huge number of hospitality jobs were at stake if something wasn’t done.

The VAT reduction has been put in place to support an industry on its knees, and to give its businesses a fighting chance to get through this.

The Ollerod is not reducing its room rates, food prices or non-alcoholic beverage prices.
They will remain as they are, and we will very graciously take the lifeline that is so generously being given to us.

McDonald’s / Pret are multi-billion pound international operations – they are choosing to pass on the 15% because they are in a financial position to be able to do this.
The same can be said for many of the other hospitality businesses that are passing on some, or all, of the VAT relief.
Others, that would be deemed independent / small, and are passing on some of the reduction, are very well established and have been trading for a long time; they have built a good buffer that now affords them the ability to do this.

We don’t have a board of investors behind us, or a billionaire backer, or a substantial bank balance.
It’s just Chris and I, and all of our hard work over the past 2 years.

Reducing our rates doesn’t ensure that our guests will spend more with us; the ‘saving’ made could be spent anywhere, or not at all. This means that we potentially won’t benefit from an initiative that was created to bolster and support our industry.

We really do wish we were in a position to pass the reduction on – the past months would have been a lot less stressful if we were, however the reality is that we’re not. We, and multiple other hospitality businesses, really need this now.

If you are disappointed or feel we that are being greedy by “keeping” the 15%, then we are sadly not the place for you.
This relief is our chance to survive, to keep our fantastic team in jobs and to continue growing The Ollerod into something really special.

Silvana & Chris