Threat of extension to vaccine passport scheme prompts Wbg forecast of bleak mid-winter for hospitality sector

The threat of an extension to the vaccine passport scheme has prompted accountants Wbg to forecast a bleak mid-winter for hospitality sector operators juggling to cope with a drop in customer traffic while facing the prospect of rising admin costs.

Deputy First Minister and Covid Recovery Secretary John Swinney has warned that Scots could be required to show a negative Covid test as well as proof of vaccination before being allowed to enter some settings. Currently, Scots must show proof of double vaccination or exemption to enter nightclubs and large gatherings.

A snap poll of SME business owners across Scotland shows that half are opposed to the extension of the vaccine passport scheme, rising to more than three-quarters of hospitality and leisure firms.

The findings from the Federation of Small Businesses show that 90% of owners of smaller hospitality venues believe the extension of the scheme will lead to a drop in takings.

Catherine Livingstone, partner and head of the business advisory services team at Wbg, said: “This possible extension to the vaccine passport scheme will dissuade a number of customers from visiting hospitality establishments, leading to a fall in takings at a time when licensees need it most.

“With a fourth wave of Covid surging through Europe, many people will understandably exercise caution, which will mean fewer customers coming through the doors at a time when there is less financial support available to the hospitality sector coinciding with a potential additional administrative cost burden at those venues required to process Covid passport authentication.”

As a consequence, Ms Livingstone advises hospitality sector operators to undertake cashflow forecasting and scenario planning as a matter of urgency.

“I would advise businesses to plan for the worst and hope for the best, bearing in mind that any previous worst-case scenario has most likely worsened with the prospect of an extension to restrictions,” she said.

“I suspect that many businesses will be fighting for their survival this winter as the outlook for the festive period is that it is unlikely to be as busy as pre-Covid festive trade. Now is the perfect time to prepare cashflow forecasts. I would urge SME owners to review the longer-term financial health of their operations as a matter of urgency.”

First Minister Nicola Sturgeon is due to announce decisions on an extension to the vaccine passport scheme on Tuesday 23rd November, but said it could be expanded to include cinemas, theatres and other parts of hospitality with any changes coming into force on December 6th.

For further information please contact Catherine Livingstone on 0141 566 7000