Earlier this week the government announced that, in an effort to suppress the infection rate, pubs, bars, cafes and restaurants across England will only be allowed to operate until 10pm. Explaining the reasoning behind the new measure, Boris Johnson noted that ‘the spread of the disease does tend to happen later at night after more alcohol has been consumed’, Dominic Raab similarly said that ‘as you go into the later hours of the evening, [there’s] a risk that the compliance with the guidance ebbs a little bit’.

 

In short, drunk people can’t be expected to follow Covid-secure guidelines. That much is easy to agree on. However, what the blanket 10pm curfew does not account for is a) that different types of hospitality venues carry different levels of infection risk and b) the different ways in which they operate will mean they are impacted differently by an earlier closing time.

 

Restaurants, especially with only table service allowed, carry a relatively low transmission risk. The government seems to acknowledge as much, with Michael Gove describing going out for dinner as ‘entirely appropriate’ and a ‘type of social contact which we can appropriately support and allow’. Yet, despite carrying a lower transmission risk, restaurants are facing the same restrictions as riskier hospitality venues such as bars and pubs.

 

For many restaurants, a 10pm curfew means the difference between two dinner seatings and one. A bar or a pub that has to shut at 10pm can still welcome in a customer at 9.30pm, but a restaurant closing at 10pm can’t seat a table much past 8pm.

 

This will have a drastic impact on restaurants’ takings, with a significant chunk of revenue ordinarily being generated during the evening period. Cebr forecasts that weekly restaurant takings will be down by up to 50% during the dinner service while the curfew remains in place, giving a total economic cost of approximately £3.8 billion between now and the end of March 2021.

 

Restaurants in London look set to take an especially large hit from the policy. The dining culture in the capital means that average expenditure in cafes and restaurants for London-based households far exceeds the equivalent figures for other regions. Restaurants in London also tend to stay open later than elsewhere in the country, meaning a higher share will have to substantially change their operating model to accommodate the curfew. As such, we estimate that around £940 million in lost takings will stem from London, representing 24.8% of the nationwide total.

 

Finding the right balance between decreasing the infection rate and allowing economic activity to continue is a mammoth task and it seems that, in the effort to achieve it, the government has taken an overly generalised approach to the hospitality sector. A crowded bar packed with inebriated patrons may well be too much of a health risk under the current circumstances, but a seated dinner at 7pm surely carries roughly the same level of risk as a seated dinner at 9pm. A more nuanced approach, differentiating between the types of hospitality venues, would have spared the sector at least part of the hardship it is about to endure.

 

For more information, please contact the authors:

 

Nina Skero – Chief Executive – 07930 695 728

Sam Miley – Economist – 07712 140 413