Reports are growing that re-opening is even more difficult than lockdown. Is this the result of a perfect storm of issues coming together?
One of the most common questions posed recently is open surprise that many operators have appeared to be unprepared for the challenge of re-opening. How can this be the case, many ask, given the time that all have spent working from home?
The question has been prompted by the fact that re-opening is proving to be even more challenging and hazardous than being in lockdown. On the face of it, it does seem that many have been not prepared for the challenge of re-opening. Many do seem to lack answers or solutions. However, is it a result of deeper problems, which are only now coming to the fore.
Many are blaming Brexit but the truth is that these issues are being reported not just in the UK but also in the US and other countries too. It is a deeper problem than just about the UK, although the UK has its own challenges to be faced.
· Consumer demand is reported to be very high which would be encouraging but many operators are struggling to obtain stock and many suppliers are running behind. This is prompting fears of restaurants needing to close through lack of stock. This is hard enough for operators but will this also impact on hospitals and care homes?
· It has been well reported that many operations are running back at 70-80% service levels but are struggling to find enough good people to fill key positions. It is reported that many companies are running with 20% less staff than would be desired.
· Both these issues will probably lead to higher cost and inflation.
· Of course, the transition from lockdown to full operating models was going to be testing. It was always going to take time.
· At the same time, the issue over unpaid rents leases and VAT which is bound to soon come to the fore. There are many operators reported to be carrying high levels of debt which may well force many to close their doors.
· Although consumer demand is high, it will be those in City Centres who will take the longest to return to strength as it is now being reported that many companies do not expect to see their employees return to September.
· One other often underestimated factor is that many senior executives and leaders are weary as the road out starts. It has been a gruelling time to manage the business through lockdown and now the challenge is simply about to get harder.
This will be a very challenging period of time and no one has all the answers. No one is sure how quickly employees will return to workplaces, at what density and how their behaviours may have changed. As we stand today, forecasts expect businesses to recover to normality by 2023. International travel will return to normality by 2025 but there will be less business travel by an estimated 20%.
All this will force change and challenge many operators. It could be that the worst of 2021 is yet to be faced.