Limiting social gathering to six people at Christmas will wipe “billions” from the economy as office parties are abandoned, hotel and restaurant bookings cancelled and farmers have a glut of unsold turkeys, analysts warn.
The measure will be “devastating” for city centres, which are struggling as office workers fail to return. The new rules are a “total nightmare” for business and will “kill the hospitality industry”, says Clive Black, of Shore Capital, the investment group. So what will be the impact?
Christmas parties
Workers spend £10 billion socialising with colleagues at Christmas, according to research.
The average employee goes out ten times in December, attending five drinks events, three lunches, and two festive dinners. Workers spend an average of £304 on this socialising, the study by Travelodge found.
It is unclear how many of these events will be affected by the rule of six but a significant number are likely to be cancelled or downsized. This will mean a loss of revenue for restaurants, pubs, nightclubs, hotels and other venues, which have already suffered a torrid year after being shut for months.
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Graham Blakely, who owns the Mercat Grill in East Lothian, Scotland, says he is normally fully booked by this point, but is unlikely to print Christmas menus this year. Around 20 per cent of bookings for the next few weeks have had to be cancelled or modified due to the new rule.
He said: “I could see the rule coming, so I’ve phoned customers who had seven or eight guests booked in and even the groups of six tend to be from a number of different households. They’ve had to be cancelled. But at least we can still be operational.”
Clothes retailers
High street chains such as Topshop, H&M, and Zara rely on the festive season. Research suggests that the average person spends £130 on clothes to wear at Christmas events. Analysts say a quiet Christmas may be the final straw for some shops, prompting a new wave of store closures and job losses.
Hotels and the travel industry
One in ten workers books a hotel to stay overnight after a Christmas party, according to Travelodge. If parties are cancelled this trade will disappear, costing the industry millions of pounds. Many families book hotels or cottages to meet relatives or friends over December or in the months leading up to Christmas. The rules are likely to trigger a surge of cancellations.
Turkey farmers
The rule of six will reduce demand for larger birds because family gatherings will be smaller, and it is too late for farmers to rear more smaller breeds. Nick Davies, 52, who has 70,000 turkeys on his farm in Usk, South Wales, said: “For us, the die has been cast. We started planning in April-May and cut back our numbers by 20 per cent but we did not tweak the breed of bird. So if a family normally has a 10kg turkey but this year only want a 5kg bird, you will have a huge shortage of smaller birds.”
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Cutting large birds into small portions is not cost-effective, he added.
