With 11 shopping days between the beginning of the 'work from home' mandate and the Christmas break, the measures can be considered proportionate to the increased transmission rate of the Omicron variant, yet as early as last week, when the new variant was identified and new travel protocols were introduced, the knock-on impact has been felt by the British luxury sector.
Cancellations of larger parties - the Sunday Times Business party at Claridge's for example - and other pre-Christmas corporate celebrations, had already knocked high-end venues’ recovery forecasts, in a sector already beleaguered by supply chain issues and staff shortages. What’s more, as one major hotelier told Walpole, “the upgraded travel quarantine requirements for travellers arriving into the UK has also resulted in significant cancellations for December in our London properties with a ripple of movement in the provinces.”
Walpole’s concern is that the side-effects of the government measures will once again hit hospitality hardest. Luxury retailers by contrast are more buoyant, on the back of very strong sales, particularly for high value items, throughout the Autumn, and with a very recent boost from domestic customers who have cancelled holiday plans and invested their money in high-end goods instead. Short of a full lockdown - thought to be unlikely - luxury retail leaders feel shoppers are unlikely to be blown off course, albeit that an absence of office workers from city centres could impact smaller, more impulsive Christmas purchases.
Nevertheless, several Walpole members sounded a note of caution; whilst confidence in Q4 trading continues to be high despite the news, concerns are growing for the first quarter of 2022. Most members were forecasting for a soft first quarter, but any news or directives to dent consumer confidence, which had been growing stronger, will be a huge blow for the sector at a time when it is mission critical to move firmly into economic recovery. As Andrew Stembridge of the Iconic Hotel Group told Walpole last night, “the Government has been very successful with the vaccine rollout and that should give us the confidence to live with the virus”.
