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The king’s money: Thailand divided over the $40bn question



For such a big change it was a very small announcement. An unscheduled communiqué published on its website on Saturday June 16 2018 revealed that Thailand’s Crown Property Bureau had transferred its entire portfolio — royal assets worth tens of billions of dollars held for more than 80 years on behalf of the monarchy and the nation — into the hands of the new King Maha Vajiralongkorn.

“All Crown Property assets are to be transferred and revert to the ownership of His Majesty so that they may be administered and managed at His Majesty’s discretion,” the CPB said, clarifying the details of a crown property law passed the previous year. It added that the assets would “now be held in the name of His Majesty” and be subject to tax.

It was an extraordinary move. Thailand’s royal wealth portfolio is estimated to be worth more than $40bn. In addition to swaths of prime real estate in downtown Bangkok, the CPB owns large stakes in the kingdom’s biggest industrial company, Siam Cement Group, and one of its largest lenders, Siam Commercial Bank. The transfer of ownership from the CPB to the personal control of the king confirmed him as one of the world’s richest monarchs. 

Strict restrictions on what can and can’t be said about Thailand’s royal family — most notably a lèse majesté law that carries a maximum 15-year jail term for saying or writing anything that might be construed as an insult — meant that the transfer of ownership was barely reported. Nobody, including the Financial Times, questioned why it was necessary or raised concerns about the concentration of financial power in Thailand’s current head of state. 

Bangkok: Thailand’s Crown Property Bureau announced in June that 'all Crown Property assets are to be transferred and revert to the ownership of His Majesty'
Bangkok: Thailand’s Crown Property Bureau announced in June 2018 that ‘all Crown Property assets are to be transferred and revert to the ownership of His Majesty’ © Anutr Tosirikul/Alamy

But two years later, amid a wave of nationwide protests, Thais are breaking their silence over the 68-year-old king’s wealth and the generous public budgets enjoyed by royal institutions. Student protesters are asking why public funds are being handed to a king who spends more time in Germany than he does in Thailand — an issue most Thai media avoid mentioning. A 10-point manifesto demanding reforms to the monarchy calls for a cut in the royal budget “in keeping with the country’s economic situation” — a nod to the coronavirus pandemic — as well as an end to royal charity projects, which receive taxpayer funds, and the separation of the king’s personal wealth from crown assets.

“It’s the biggest issue of all in Thailand,” says Parit “Penguin” Chiwarak, one of the most radical of the student protesters in pressing for royal reforms. “The royal institution can interfere in politics because they have enough money.

“If we don’t say it now, when are we going to say it?”

Emboldened critics

It is hard to overstate the impact of these criticisms in a country where the royal family was until recently viewed as untouchable. But precedents are being broken by an outspoken and, to many Thais, radical group of young leaders who are questioning the foundations of Thailand’s political order. In a provocative move in September they laid a plaque near the royal palace stating Thailand “belongs to the people, not the king as they deceived us”. 

Anon Nampa, a senior protest leader, calls the royal budget “excessive” and says it has been “unnecessarily increased”. The focus on the king’s wealth comes as Thai authorities, who have managed to restrict coronavirus at just over 3,600 reported cases, are now confronting the economic fallout, which has left millions unemployed and hurt an economy heavily reliant on tourism and exports. 

Parit 'Penguin' Chiwarak, a radical student protester, says: 'The royal institution can interfere in politics because they have enough money. If we don’t say it now, when are we going to say it?'
Parit ‘Penguin’ Chiwarak, a student protester, says: ‘The royal institution can interfere in politics because they have enough money. If we don’t say it now, when are we going to say it?’ © Lauren DeCicca/Getty

Thanathorn Juangroongruangkit, who led Future Forward before authorities dissolved the party in February, says royal wealth is 'taxpayers’ money, it has to be transparent. [But] these things are not transparent'
Thanathorn Juangroongruangkit, who led Future Forward before the party was dissolved, says royal wealth is ‘taxpayers’ money, it has to be transparent.’ © Mladen Antonov/AFP via Getty

At a rally on September 20, Mr Parit called for a boycott of Siam Commercial Bank, which he called “a money pot of feudalism”. “You are replenishing money for the German,” he said, using the name some anti-government Thais use for the king. “Close your SCB account, get all your money out, and burn your bank book.” 

Thailand’s central bank was quick to say the next day that it had noticed no surge in withdrawals from SCB. In a country without reliable opinion polling, it is impossible to gauge the level of support for the students’ call for scrutiny of royal money and finances, but it is safe to say that the monarchy and political status quo enjoy significant backing.

Many Thais, even those who oppose Prayuth Chan-ocha’s military-backed government, think the students have overplayed their hand with the calls to curb the monarchy’s powers, and that they are entering dangerous territory in a country with a history of coups and political bloodshed. 

Support for the protests will be tested on Wednesday, when the students plan their next big demonstration. They have spoken of marching to Government House to press for the resignation of the Prayuth government and “seizing” back the Democracy Monument in central Bangkok.

The students’ frankness has emboldened other Thais. MPs from Move Forward, formerly Future Forward, Thailand’s most outspoken opposition party, have been using their powers in parliament to probe spending on royal institutions. They point out that it has risen sharply since the king took the throne after his father King Bhumibol Adulyadej died in 2016.

Anon Nampa, a senior protest leader, calls the royal budget 'excessive' and says it has been 'unnecessarily increased'
Anon Nampa, a senior protest leader, calls the royal budget ‘excessive’ and says it has been ‘unnecessarily increased’ © Lauren DeCicca/Getty

Meanwhile, Heiko Maas, Germany’s foreign minister, last week raised the issue of the king’s residence in the country, reflecting growing discomfort in Berlin as protests escalate in Thailand. “We have made it clear that politics concerning Thailand should not be conducted from German soil,” Mr Maas said in response to an MP’s question in the Bundestag. “If there are guests in our country that conduct their state business from our soil, we would always want to act to counteract that.”

The royal bill

While the Thai king spends most of his time in Germany, he has taken firm steps to consolidate the power and wealth of royal institutions back in Bangkok since ascending to the throne. 

In 2017, the year the law on crown property assets was passed, the king combined the former royal household office with the privy council and a royal personal safety body to create a single Royal Office. Last year he issued a decree transferring two army regiments to the Royal Office, putting them under his direct control. 

Until this year, Thais — even opponents of the Prayuth government — avoided criticising the king’s role in Thailand’s status quo. But as near daily protests broke out across Thailand in August, Move Forward MPs used their seats on the budget committee of Thailand’s lower house to query royal spending. 

“It’s taxpayers’ money, it has to be transparent,” says Thanathorn Juangroongruangkit, who led Future Forward before authorities dissolved the party in February, but acts as an adviser to the committee. “These things are not transparent.”

According to Thailand’s budget, spending on the Royal Office is set to reach nearly 9bn baht ($290m) this year, more than double the Bt4.2bn budgeted in 2018, its first full year of operation.

Move Forward also questioned royal spending paid by other government departments, including Bt1.2bn from the defence ministry and Bt1.6bn from the Thai police for royal security, and Bt7bn budgeted for royal development projects, charitable endeavours that receive taxpayer money. The party also queried the Royal Office’s use of aircraft, and were given by Mr Prayuth’s office an inventory of 38 planes and helicopters reserved for royal use. 

The king’s corporate assets include a 33.6 per cent stake in Siam Cement Group, valued at $4.5bn
The king’s corporate assets include a 33.6 per cent stake in Siam Cement Group, valued at about $4.5bn © Dario Pignatelli/Bloomberg

Protesters have called for a boycott of Siam Commercial Bank, in which the king owns a 23.4 per cent stake worth $1.7bn
Protesters have called for a boycott of Siam Commercial Bank, in which the king owns a 23.4 per cent stake worth about $1.7bn © Brent Lewin/Bloomberg

Mr Thanathorn is also critical of the transfer of royal assets to the king, pointing out that he is now a leading corporate shareholder via the CPB’s stakes in SCG and SCB, and yet enjoys elevated legal status. “The king is now a player in the market,” he says. “It’s just wrong. It’s undemocratic.”

The CPB, akin to a sovereign wealth fund, had its origins in the Privy Purse Bureau, a body devoted to the upkeep of royal family members that began to invest in Siam’s economy as it was modernising more than a century ago. In the 1930s, after the uprising that made Thailand — as it was later renamed — a constitutional monarchy, the CPB was established, with a clear division between the king’s personal assets and royal ones. 

As Thailand’s economy was taking off in the 1980s, the fund became a leading investor in the stock exchange and industry. The CPB was chaired by the finance minister until 2018, when the king appointed as its head air chief marshal Satitpong Sukvimol, who now also chairs SCG.

“The demands by protesters to audit the king’s finances are unprecedented,” says Tamara Loos, a professor of history and south-east Asian studies at Cornell University. “But so is the way the king utilises what were formerly state funds.”

Royal finances


Estimate of the value of assets held by Thailand’s Crown Property Board


2011 estimate of the property assets under the CPB’s control published in a book on the late King Bhumibol


Spending on the Royal Office this year, more than double the amount budgeted in 2018


Planes and helicopters reserved for royal use, MPs on the budget committee of Thailand’s lower house were told

Valuing the king’s wealth

Estimating the value of the king’s wealth is largely a matter of guesswork, as no full inventory of the monarchy’s assets is publicly available. The CPB last published an annual report in 2017 that included investment projects such as Langsuan Village (later renamed Sindhorn Village), a luxury real estate and retail development in Bangkok’s central business district, and the fund’s public works and charitable projects. 

Members of the Royal Thai Police stand under a portrait of King Maha Vajiralongkorn near the Grand Palace in Bangkok
Members of the Royal Thai Police stand under a portrait of King Maha Vajiralongkorn near the Grand Palace in Bangkok © Jewel samad/AFP via Getty

The king’s corporate assets are easier to value: he owns a 23.4 per cent stake in Siam Commercial Bank, worth $1.7bn, and 33.6 per cent of Siam Cement Group, valued at $4.5bn. However, the CPB’s biggest asset is real estate, mostly in Bangkok, but also in Thailand’s central plains and other regions.

A 2011 semi-official biography of the late king, King Bhumibol Adulyadej: a Life’s Work, whose authors were given access to CPB officials, estimated that the Bangkok real estate portfolio alone was worth about $33bn at the time, and added that a “high estimate” of the assets under the CPB’s control was about $37bn. At the time the bureau owned 3,230 acres in Bangkok and another 13,200 acres outside the capital, according to the book.

“If such wealth belonged to an individual, he or she would rank in the top six on the Forbes list of the world’s billionaires,” the book said. “But this wealth does not belong to an individual. It belongs to the crown.” 

Since the king took ownership of CPB assets, that has not been the case. Thailand’s property market has been buoyant in the decade since, although the pandemic has caused demand and prices to fall. Thailand’s government pushes back when journalists, including the FT, try to estimate royal wealth or refer to the billions of dollars of assets the king owns.

In 2012, when Forbes, which the previous year had declared Bhumibol as the world’s richest monarch, published a piece on “His Majesty’s balance sheet” and estimated the king’s fortune at more than $30bn, the Thai embassy in Washington criticised the magazine for including CPB assets “held in trust for the nation” into its calculation of his personal wealth.

Thailand’s foreign ministry declined to comment and a government spokesman did not respond to a request for comment. When the FT made reference to the king’s wealth in a recent story, the Thai embassy in London wrote to the newspaper saying: “The claim that His Majesty the King is in charge of billions of dollars of wealth is unfounded.” The letter noted the CPB was “managed by a board of directors” who worked towards “maintaining a balance between financial stability of the assets as well as generating social incomes to benefit all stakeholders”.

German media have reported extensively that King Maha Vajiralongkorn is renting a hotel in Garmisch-Partenkirchen in the Bavarian Alps
German media have reported that King Maha Vajiralongkorn is renting a hotel in Garmisch-Partenkirchen in the Bavarian Alps © Philipp Guelland/EPA-EFE

The German dilemma

Interest in King Vajiralongkorn’s residence in Germany — a staple for local media — has intensified recently as officials asked awkward questions not only about the king’s political role, but also the tax implications of his stay. According to local politicians, the monarch was living in a villa at Tutzing near Lake Starnberg, about 40km from Munich, at the time of his father’s death. More recently, German media have reported extensively that the king is renting a hotel in Garmisch-Partenkirchen in the Bavarian Alps.

In April two Green party MPs in Bavaria’s state legislature, Claudia Köhler and Tim Pargent, posed written questions to the state government as to whether the king might have been liable for inheritance tax. 

The Bavarian government, in its replies, cited German privacy protections surrounding tax and “the state interests of foreign affairs”. However, Mr Pargent says he established that the king would have been liable for inheritance tax. Diplomats are immune, but the Thai king is not a diplomat and his residence in Tutzing is not a consulate, according to the MP. 

“The issue is covered by tax secrecy,” Mr Pargent says. “I am not expecting a final answer through official channels. However, through our questions we were at least able to shine a bit of light on the matter.”

In Bangkok, Mr Thanathorn and MPs from his former party have exhausted their inquiries for the current budget round. But, they say they will take up the matter of royal spending again next year. 

One thing that is transparent, the opposition figure says, is the status of royal assets. “In 2018, they made it clear, without question, who the CPB belongs to.”

Additional reporting by Ryn Jirenuwat in Bangkok

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Large-cap US stocks with high ETF ownership have underperformed




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Large-cap US stocks favoured by exchange traded funds have underperformed the wider market in recent years, raising fears that “crowding” in popular companies is damaging returns.

Analysis of the constituents of the S&P 100 by Vincent Deluard, global macro strategist at StoneX, a New York-based brokerage, found that since 2018 the stocks most owned by ETFs have tended to perform worse that those more lightly held by such funds.

Moreover, this negative correlation “has been getting stronger in the past three years”, Deluard said, “which I find interesting and possibly consistent with the view that a high ETF ownership depresses future returns by pushing up valuations”.

If that thesis is correct, then “the best opportunities to compound wealth should therefore be found outside of popular funds and indices,” he added.

Deluard’s research adds some credence to the arguments of some value investors that the rise of ETFs is just the latest example of “the madness of crowds” and that price-insensitive index funds create “passive bubbles” by piling into the same momentum-driven stocks, only for these bubbles to then burst.

The booming global ETF industry has seen its assets almost double to $9tn since the end of 2018, according to figures from consultancy ETFGI, with the bulk of this money both in the US and in equities.

Simultaneously, there has been a partial shift from broad market capitalisation-weighted ETFs — which pump money into every stock in an index in line with its pre-existing size — to narrowly focused thematic ETFs and those investing on the basis of environmental, social and governance factors.

The assets of thematic ETFs have tripled since the end of 2018 to $382bn, according to ETFGI, while those of ESG ETFs have risen ninefold to $246bn over the same period.

This has fed suggestions that ETFs have evolved from attempting to passively reflect stock markets to actively shaping them, distorting prices of particular companies as an ever larger share of money flows into favoured “ETF darling” stocks.

However, the data from StoneX suggests that the opposite may be happening, with unfavoured stocks seeing stronger gains.

Deluard found that ETFs’ share of ownership ranges from 4.1 per cent to 11.2 per cent for the 100 largest US stocks.

ETF ownership and return

The 10 stocks most lightly owned by ETFs include five that have more than doubled investors’ money over the past three years: Morgan Stanley, T-Mobile US, Deere & Co, Amazon and Tesla, the latter with an outsized 820 per cent total return.

Apple, Alphabet and Facebook are in the same quadrant.

In contrast, the stocks most favoured by ETFs include a disproportionate number of weak performers, such as Gilead Sciences, Chevron, ExxonMobil, Intel and 3M, alongside a smaller number of strong performers such as chip designers Texas Instruments, Qualcomm and Lam Research.

Deluard played down the importance of his findings to some degree, saying the negative correlation between the level of ETF ownership and performance was statistically “weak” and that relative sector performance “has been the main driver” of returns.

Although there has been high profile coverage of some tech ETFs, the ETF industry as a whole tends to be underweight technology stocks, something he attributes to a meaningful block of stock typically being locked up in founders’ stakes and employee ownership, leaving less for outside investors.

Similarly, despite the rise of ESG ETFs, the industry at large is still overweight oil companies such as Chevron and ExxonMobil, which are favoured by value and dividend ETFs.

Comparable analysis Deluard conducted into the 2012-2018 period found a weaker, though still negative, link between ETF ownership and performance.

Nevertheless, even if his findings can be attributed to a statistical quirk, there is at least no evidence that rising ETF ownership is distorting the market by pushing up the prices of ETF darlings at the expense of unloved and overlooked stocks.

Deluard does not, though, rule out the possibility ETFs might be pushing up prices of small or mid-cap stocks that are less able to absorb strong ETF inflows, such as those in popular fields like gold miners or cyber security companies.

“Passive distortions are likely much greater for small caps whose limited float can be overwhelmed by index funds’ relentless buying,” he said.

Peter Sleep, senior portfolio manager at 7 Investment Management, cautioned that Deluard’s findings could vary somewhat if they were based on free-float market capitalisation, omitting founders’ stakes from the calculation.

On this basis, ETFs would own a higher percentage of technology companies’ shares, reducing the tendency for lightly held shares to have performed better.

Overall, though, Sleep welcomed the findings saying “I think it’s a good thing. You often hear people say that the market is only going up because of ETFs,” an argument the analysis undermines.

Todd Rosenbluth, head of ETF and mutual fund research at CFRA Research, said the findings ran counter to what he would have expected, and possibly signified ETF darling stocks first witness an unsustainable rise, followed by a reversion to the mean.

“There have been two narratives out there,” he said. “One is that too much money is going into ETFs and thus they are driving the car, and stock prices are being dragged along with them. This seems to disprove that,” Rosenbluth said.

“The second is that people will pile out of these [ETF darling] securities and the stocks will fall.”

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Biden faces tough path to US economic recovery




Joe Biden is grappling with a messy and unpredictable economic outlook as the twin threats of rising inflation and slow jobs growth shake confidence in the steadiness of the US recovery from the pandemic.

The US labour department this month reported that the pace of job creation slowed significantly in April, fuelling concerns of widespread discrepancies in the labour market.

It followed up that report with figures published last week showing an unexpectedly steep jump last month in its consumer price index, compounding fears of mounting inflationary pressures.

The data have exposed Biden to sharper criticism of his economic management from Republicans and rattled hopes of a smooth rebound from the coronavirus crisis on the back of hefty fiscal stimulus and quick vaccination rollouts.

The US has driven the global economic recovery, with the IMF predicting gross domestic product growth of 6.4 per cent in 2021.

“There are a lot of signs of a resurgence in aggregate demand — an economy that’s recovering, but that recovery is going to be chaotic,” said Wendy Edelberg, director of the Hamilton Project, an economic think-tank at the Brookings Institution. “And yes, really difficult to manage.”

Senior Biden administration officials have cautioned against drawing too many conclusions from one month’s data. They argued that average monthly job creation over the past three months has still been much stronger than in the previous quarter, that the inflation bounce is likely to be transitory and that the recovery remains firmly on track.

But they have also acknowledged high levels of economic uncertainty at a time of big shifts in spending patterns and employment trends, and as health-related restrictions are being lifted across the country more rapidly than predicted — partly because of the pace of the country’s vaccination campaign.

“There’s going to be a period, as supply starts to equal demand and sectors are healing and recovering, [during which] there’s going to be some choppiness,” Cecilia Rouse, chair of the White House Council of Economic Advisers, told reporters on Friday.

“We know that the mismatch between different parts of the economy will show up in unexpected ways until the economy more fully recovers. As the president urged earlier this week, we must be patient,” she added.

Critics of the administration’s economic policies — ranging from former Democratic Treasury secretary Larry Summers to Republicans on Capitol Hill — have seized on the latest data to argue that the Biden administration has recklessly dismissed the risks of excessive fiscal stimulus, and played down the economic warning signs.

“I was on the worried side about inflation and it’s all moved much faster, much sooner than I had predicted. That has to make us nervous going forward,” Summers wrote on Twitter on Friday.

“I think there’s a decent chance that this works out fine. And that we just have a super rapid recovery and a great year,” said Michael Strain, director of economic policy studies at the American Enterprise Institute, a conservative think-tank. “I think there’s also a chance that this could end really poorly.”

Other data releases last week failed to clarify the picture. The University of Michigan’s consumer sentiment index showed rising long-term inflation expectations, while retail sales were flat last month after a big jump in March. On the brighter side, weekly jobless claims out on Thursday dropped to a low point for the pandemic.

Cecilia Rouse
Cecilia Rouse said: ‘There’s going to be a period, as supply starts to equal demand and sectors are healing and recovering, [during which] there’s going to be some choppiness’ © Reuters

At this stage, there were no signs from the White House of any big changes to Biden’s policy agenda to address the emerging economic picture. On the labour market front, the president moved to enforce a requirement that citizens who were offered “suitable” jobs not be eligible for unemployment benefits, and Rouse said the White House was reminding businesses of a tax credit for employee retention set up as part of its stimulus programme.

The White House is sticking by the fiscal support it has enacted with the help of congressional Democrats not only to stoke the country’s recovery but also to help low-income families. It has also pointed to its confidence in the Federal Reserve to manage any rise in inflation.

But Republicans and conservative economists have called for more dramatic action to cool the economy, such as an early end to federal unemployment benefits, which Republican-led states across the country have refused to pay.

Meanwhile, economists whose forecasts were badly wrecked by the data released in recent days warned that any assumptions about the US recovery — let alone policy changes — may well have to be revisited.

“We’re in such an uncharted territory,” said the Hamilton Project’s Edelberg. “When you’re talking about the changes in aggregate demand that we’re experiencing, and changes in supply that we’re experiencing — whatever uncertainty you have about inflation in normal times, increase that by an order of magnitude.”

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Covid rules leave pubs and restaurants in England fearing the great indoor reopening




Before the pandemic, the tiny Sicilian restaurant Franzina Trattoria was loved by south London locals for its long communal tables. Customers would squeeze in and share food with people they had never met. Two diners, who were complete strangers, ended up getting married.

But as owner Stefania Taormina and her husband Pietro Franz prepare to welcome the first diners since December back into their 4-metre-wide eatery in Brixton on Monday, Taormina fears they may not return.

“We don’t see many bookings inside [and] it’s a bit scary. We think people are thinking differently now and sharing tables is maybe a problem,” she said.

To comply with Covid-19 restrictions for hospitality businesses in England when the government allows them to open indoors from Monday, Taormina has cut the number of guests seated in the restaurant from 55 to 14 and spent £1,000 on plastic dividers to break up the tables.

The saving grace has been the six two-person tables on the restaurant’s outside terrace, which have been booked all hours of the day since restrictions on outdoor eating and drinking were lifted in late April. “We are breaking even just about with the terrace open,” she said. “I think people still prefer to go to places outside.”

The pandemic has left the hospitality industry facing a crisis of historic proportions. Since the pandemic struck, UKHospitality, the trade body, estimates the sector across Britain has lost £80.8bn in sales between April 2020 and this March, compared with the previous 12-month period, equivalent to £9m every hour.

Line chart of like-for-like hospitality sales compared with 2019 (% change) showing pub and restaurant sales have plummeted during the pandemic

More than 8,500 of the UK’s 115,100 licensed premises have gone out of business. And only a third of those operating have the outdoor space that has allowed them to reopen since the government allowed alfresco dining from April 12.

Even as the rest make ready to open inside in the biggest easing of restrictions in England since lockdown was imposed in January, many pub and restaurant owners fear the remaining Covid rules — waiter service only at tables that must be at least 1m apart, with a limit of six people from no more than two households — will make most establishments unprofitable.

“The vast majority of our pubs will be trading on May 17 [but] I expect us still to be trading at levels where we will be making a loss,” said Andy Spencer, managing director of Punch Pubs, which owns 1,100 premises. He said that pubs would run at half their usual capacity and that the restrictions were “challenging, time consuming and expensive”.

Key to profitability for most pubs and restaurants is the removal of all social-distancing rules, and many owners were buoyed by recent comments from Boris Johnson. At the start of this week, the UK prime minister raised the possibility that all restrictions could be lifted over the summer.

But by Friday, Johnson warned that the next state of England’s lockdown easing plans due on June 21 — when all existing rules are set to fall away — may have to be delayed because of a surge in infections caused by the emergence a Covid-19 variant first detected in India.

Opening with extensive restrictions in place has presented other challenges, not least the need to train staff who have been furloughed for months.

Pedestrians walk past a PizzaExpress restaurant in central London
PizzaExpress’s 6,000 staff have had a week of ‘full immersion’ training in both hygiene measures and service © Tolga Akmen/AFP/Getty Images

Zoe Bowley, managing director of PizzaExpress, said the chain’s 6,000 employees had undergone a week of “full immersion” training, both in hygiene measures and service. “Some of our team members, apart from a small gap in November, haven’t worked for a year,” she said.

The sector also faces a labour shortage with a loss of experienced and qualified staff, partly due to the pandemic and partly due to Brexit, with EU workers returning to their home countries.

This will add to the pressure on employees facing customers for the first time in months. “They are rusty after furlough for a year and are heading back to jobs where they will have to cover other roles because there aren’t enough staff to cope,” warned Mark Lewis, chief executive of the charity Hospitality Action.

Another common fear is antagonising guests by insisting they comply with the Covid regulations, such as checking in with the test-and-trace app and wearing a mask when moving around.

Even if reopening goes as planned, the absence of foreign tourists and commuters for at least part of the summer — with international travel still heavily restricted and office staff encouraged to continue to work from home until at least late June — is expected to leave many city-centre establishments short of customers.

Anna Sebastian, manager of the Artesian bar at London’s Langham hotel
Anna Sebastian, bar manager of the Artesian at London’s Langham hotel, said ‘normality won’t be restored’ until tourists return in large numbers © Charlie Bibby/FT

“We’re very dependent on footfall from tourists shopping on Oxford Street and hotel guests, so until they return in large numbers, normality won’t be restored,” said Anna Sebastian, bar manager of the Artesian at The Langham hotel in London.

If there is a positive to have come out of the crisis, the pandemic has forced the industry to accelerate the adoption of technology that has improved productivity: payment and ordering apps allow operators to turn tables faster and employ fewer staff.

Customers using apps also tend to spend more per head having had more time to peruse the menu and the ability to order as and when they want, according to several pub and restaurant owners.

But Bowley warned there was a “fine balance” to strike to make sure that an industry built on personal service did not become “faceless” just as it needed customers to return.

Technology aside, Spencer said he feared that until sports and live music could restart and customers could stand up in crowded bars, the pub experience would be a “sanitised” one. “We have taken out a lot of the soul . . . and a lot of the things that make the pub really special,” he said.

It is the same pre-Covid conviviality that Taormina fears will be lost at Franzina Trattoria. “It was a joy for me because you would see people who you had never seen in your life start to drink together and talk about food together and then sometimes they would go out together afterwards . . . I am scared that it will not happen again.”

Additional reporting by Oliver Barnes

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