Coronavirus: Pubs urged to do whatever it takes to avoid closure
- Published
Nic Wood, who owns 22 pubs and hotels, said he had spent £250,000 making his premises Covid compliant
Pub and hotel owners are being urged to do whatever it takes to avoid closing down amid the coronavirus pandemic.
Experts say that if they have to sell up, the businesses will be worth more if they are open and trading.
They estimate that a business loses up to 60% of its value on the market as soon as it shuts.
The Scottish Licensed Trade Association has estimated that up to two-thirds of pubs will have to close in the next few months due to Covid restrictions.
Peter Seymour, head of hotel and leisure at chartered surveyors Graham and Sibbald, said owners needed to "hang in there" - even if they were not making much money.
He said: "For those business owners who also own their building, they will be able to sell for much more as a going concern than if they sell the building after closing down the business.
"They need to stay open and keep getting cash through the tills even if it is reduced cash.
"On the market their business is worth much more open and trading than if it is shut.
"There are three assets to a business - the building, the fixtures and fittings, and the goodwill of the business. As soon as a business permanently shuts its doors it loses the goodwill, which is a valuable part."
He added that lease holders - business owners who do not own their premises - were now reaching the point where their rent arrears may be exceeding the value of their business asset.
He said: "The continued pressure of trading at reduced levels is not going to have a long-term bearing on value if the business owners can hang in there until spring next year."
'Still viable'
Nic Wood is the owner of Signature Group, which has 22 pubs and hotels in Edinburgh, Glasgow, St Andrews, Bridge of Allan and Aberdeen.
He said: "I have five pubs which I have not reopened since they were closed in March, and I will now make sure I don't sell them.
"If the business is shut then you only get the value of the bricks and mortar on the market, whereas if the business is open then you sell for more.
"It is much better to sell a business that is still viable."
He added that he had spent £250,000 making his premises Covid-compliant.
He said: "This is the biggest challenge I have ever faced. I have never made anyone redundant in the last 17 years in the business until last month, when I had to let go about 200 staff."
He said the business still had 470 staff, and he was spending between £5,000 and £7,000 for each premises a week while they were shut during the latest Scottish government restrictions.
"The restrictions and rules are constantly changing and its causing us to play a guessing game, which in turn is meaning we are spending more and more to try to keep our businesses afloat," he added.
