A veteran nightclub operator has called on the government to introduce a Covid-style loan guarantee scheme to unlock investment in what he described as a “logjammed” hospitality sector.
Peter Marks, chairman of Neos Hospitality and a former chairman and chief executive of bar and club group Rekom, said poor access to finance and rising employment and tax costs had left the sector struggling to attract investment. He argued that a state-backed guarantee scheme could help release private capital and prevent stagnation on the high street.
Marks said finance for hospitality was “logjammed”.
“We need something to get it moving,” he said. “The market is broken. It is not going to be able to repair itself if it’s not investable.”
He said investors were increasingly reluctant to back the sector.
“I speak to my friends in private equity, I know a lot of the fund managers, because I’ve been around forever, and they say, we can’t see an exit, so we won’t enter,” he said.
Marks proposed that the government underwrite 80% of bank loans to larger hospitality businesses to encourage lending. “What you need to do,” he said, “is get the banks to lend to these sectors, because they haven’t been since 2008.”
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