Plan B, wage rates, supply, TUI, On the Beach & other:

A DAY IN THE LIFE:

They say there’s a danger that, given enough time, you will become your father.

Or your mother, of course, but the sentiment’s the same and I find that, whilst I used to look askance at my dad’s endless battles with the neighbourhood cats to stop them digging up his plants and depositing some product of their own, I have very much the same attitude to the flock of verminous squirrels that infest our garden and which spend their lives eating bird food, birds’ eggs and, no doubt when they can, actual birds themselves.

So, why not reintroduce pine martens? They’re native. Or at least they were and they’re a squirrel’s worst nightmare. A grey squirrel’s, at least. Apparently they’re a bit big to catch their red brethren. Failing that, give me a cat that eats squirrels. On to the news:

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PUBS & RESTAURANTS:

Plan B:

Yesterday’s Cabinet meeting endorsed the introduction of Plan B. The Telegraph had earlier reported that modelling undertaken for the Cabinet centred on the impact of urging people to work from home over the Christmas and New Year period. Workers are now, indeed, being asked to work from home if possible, but there is no prospective end-date given for this advice / request. In addition, vaccine passports will be required to attend nightclubs and other larger venues. Omicron infections are said to be doubling every two to three days but the implementation of the measures is to be delayed for a week.

Trade bodies have reacted with disappointment. UKH says ‘while the government clearly acknowledges that hospitality is safe and can continue to host celebrations in the lead up to Christmas, the measures announced today will significantly impact consumer confidence and be particularly devastating to city and town centre venues. As such, they risk devastating the hospitality sector amid its most important time of the year.  We therefore desperately need support if we are to survive this latest set of restrictions and urge the government to stand behind our industry. That means full business rates relief, grants, rent protection and extended VAT reductions. Anything less would prove catastrophic.’

The BBPA says the new restrictions ‘are a blow to pubs and brewers, just as the busy Christmas season begins, a period which is so vital to their recovery and viability of the sector post-COVID.’ It says the measures are ‘a huge blow for our sector as it further undermines consumer confidence and is devastating for pubs based near offices and in town centres.’ The BBPA adds ‘the festive period is crucial to the recovery of our sector, so these restrictions could not have come at a more important trading time. They threaten the viability of pubs who will lose vital revenue over the Christmas period and so the Government will need to look at providing support.’

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Labour, wages & inflation.

The most efficient way to seed inflation is to raise wages and then jack up your prices to pay for it. Restaurant workers in Harrod’s are reported to have secured a 25% pay rise. Fulham Shore’s Franco Manca put wages up by 20% in August and the threat of delivery strikes at Tesco over Christmas has been removed because the staff in question secured a higher-than-first-offered pay rise with more to come in February. Markit in the US says wages across small businesses are rising at their fastest rate since it started its data series in 2011.

There is relatively little chance that inflation is transitory, the Bank of England (and the Fed) will be obliged to raise interest rates and, it light of significant pay rises awarded be successful companies, less successful operators will find their margins squeezed and their staff hard to retain.

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Supply issues.

The Independent reports that ‘delays to cross-Channel trade are still worsening almost a year after Brexit checks came in’.

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Omicron issues:

Adzuna reports that job adverts in hospitality have fallen 25% in a week as hiring plans are put on hold due to a downturn in bookings caused by concern over the Omicron variant. The number of advertised hospitality jobs on Dec. 5 was 80,327, down from 107,782 the week before.

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Consumers could find themselves worse off next year as Ofgem suggests that energy bills could rise for some by as much as £1,900 a year from April due in part to supplier collapses and a move to world prices. For consumers lucky enough to be covered by the energy cap, prices will rise perhaps by between £400 and £520.

COMPANY & OTHER NEWS:

Accolade Wines has launched its first branded bar, called The Jam Shed Bar located in The Garden Bar in Bromley. The bar will be serving its signature Jam Shed Mulled wine during the winter.

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Unite union has suspended plans for 1,200 Tesco distribution centre workers to strike and instead recommended members to accept an improved pay offer in a new ballot. Workers will get a 5.5% rise backdated to July plus a further 0.5% in February.

LEISURE TRAVEL & HOTELS:

Tui has said that the pace of holiday bookings is slowing down after the emergence of the Omicron variant. Despite this, it expects bookings for next summer to be close to pre-pandemic levels. Tui said it had 4.1 million bookings for its next winter and summer seasons, with 1.4 million bookings since 3 October. Given current developments, comments on FY22 may be wishful thinking.

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On the Beach has reported full year numbers saying that revenue was £30.5m compared with £71.2m in the prior year. The group reports a loss before tax of £18.4m on an adjusted basis compared with a profit in the prior year of £0.6m. The loss per share is 9.7p compared with a loss last year of 0.5p. The company says that ‘booking volumes remained low throughout the complete UK lockdown 4 Jan 2021 to 17 May 2021’ and adds that ‘dampened consumer confidence through the calendar year due to complex and inconsistent rules coupled with prohibitively expensive testing costs’ has also hit revenues.

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Law firm PGMBM is to seek a judicial review into the government’s mandatory hotel quarantine policy for travellers entering the UK from red list countries, saying that ‘people who are fully vaccinated and have tested negative should not be detained in this way’.

Travel Weekly reports that some travel firms are set to defy Boris Johnson’s work from home advice under revised pre-Christmas Plan B Covid restrictions. It adds that travel unions are asking for a return of the furlough scheme.

A UKinbound survey shows that 86% of its members have suffered cancellations or expect to see travel cancelled in the run up to Christmas, with three quarters of cancellations being for December.

UKinbound CEO Joss Croft said ‘International consumer confidence to travel to the UK has taken another huge hit, and the UK’s knee-jerk decisions and lack of support for businesses that bear the consequences, means the recovery of this industry has already been derailed.’

JG Travel Group’s National Holidays has launched new Disneyland Paris coach breaks for 2022. Departure dates include May half-term, the main school summer holidays and October half-term.

STR reports that U.S. hotel profitability increased month on month in October. EBITDA per-available-room was up to $44.14 in October, with profit margins close to pre-pandemic levels at 38%.

Global aviation analytics firm Cirium predicts that 47% growth in global airline capacity could see a return to 2015 levels by the end of next year. Flights were still 38% down between January and October compared to the same period in pre-pandemic 2019. A varied recovery in 2021 saw global capacity return to 2006 levels.   

Minoan has commented on Greek legal changes that should allow it to move forward. The Chairman says ‘I am extremely pleased by the changes brought about by the new Law on Strategic Investments, which will be complemented by the new Development Law. Taken together with the numerous changes to planning laws, which Greece has enacted over the last few years, it means that current and future trends in tourism, including Minoan’s Itanos Gaia Project, will allow the Company to move forward with confidence.’

FINANCE & MARKETS:

The implementation of Plan B makes an interest rate rise next week less likely. Despite that, UK 10yr gilt yields rose by 3bps yesterday to 0.76%. Sterling was weaker at $1.3204 and €1.1655. Oil price higher at $76.29. World markets mixed yesterday with London set to open up around 14pts as at 7am.

RETAIL WITH NICK BUBB:

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