Many hospitality businesses have not survived the pandemic, UK Hospitality chief executive Kate Nicholls said.
It comes after, earlier this month, Nicholls said many EU citizens left the UK permanently as a result of Brexit – but a quarter of UK hospitality workers are foreign nationals.
She now thinks there will be “a long road to recovery” for hospitality businesses. She said many are still making a loss even if they have reopened under the more relaxed coronavirus restrictions.
There is a “cautious optimism” among firms who have now worked their first Friday night since venues were able to resume trading indoors in England.
But she warned that customers should expect the look of the high street to change.
Ms Nicholls told BBC Breakfast: “The first week has not been as exceptional as we had when we first opened outdoors and there was that rush to come back.
“We are looking at what the numbers will look like this weekend – that will be critical.”
Pubs, restaurants and cafes are now able to serve customers indoors but they have to abide by a range of restrictions which includes groups of no more than six – or two households of any size – being allowed inside and people having to order, eat and drink while seated in venues where alcohol is served.
Ms Nicholls told the programme: “There has been a contraction of one in 10 restaurants across the UK but in our high streets it is as high as one in five, so our high streets are going to look very different – that’s overall, including pubs, bars, restaurants and hotels, and the contraction has been right across the board in those areas.
“All of our businesses are suffering and sadly we have lost 660,000 members of staff.
“Furlough and business support has kept those numbers as low as we can but there is a big risk as we come out of this pandemic as these businesses are going to be very heavily in debt.
“They are much more indebted than any other sector of the economy. In particular, they have got high levels of rent debt so the shadow of Covid is going to hang over these businesses for about six months before we know that we can get them through.”
Recruitment crisis because of Brexit
Nicholls had told TLE that the hospitality sector is experiencing a recruitment crisis.
She said: “We have a large number of Eastern European, Polish, Spanish and Italian workers working in housekeeping, kitchens, restaurants and hotel managers.
“In terms of future requirements, the system the UK government has put into place is going to prevent EU citizens to fill jobs post-pandemic.
“We have got domestic unemployment in the UK, shortages of people who are available for work and it’s about making sure that hospitality is seen as an attractive sector in the future.”