Hospitality took a £115bn hit due to Covid

The full extent of the damage done to the hospitality industry is a massive and devastating loss of £115bn, according to figures released by UKHospitality as it urged the UK Government to keep VAT at current level of 12.5%.

The sector has racked up £114.8bn sales lost versus what was expected for 2020/21. With a full 24-months of data available, hospitality, which in normal times generates up to £140bn-a-year, has lost 43% and 45 full weeks of sales since March 2020.

UKHospitality Chief Executive Kate Nicholls said, “These figures lay bare the utter devastation that two years of this terrible pandemic has wreaked on the third-largest private-sector employer in the UK, with thousands of businesses closed, many on the brink of collapse, and countless jobs lost. The last thing operators need – and which a lot of them simply wouldn’t survive – is a VAT increase.

“Businesses big and small have been left with depleted cash reserves and crippling debt as Covid loans as well as contending with a gaping hole of 400,000 job vacancies, as more than 80% of hospitality businesses report they have roles to fill.

However she added, “with all restrictions about to end, there are signs of hope and recovery. With government support, hospitality – which is full of energetic, creative and entrepreneurial people – must be at the vanguard of the UK’s wider post-pandemic recovery.”

The latest edition of the UKHospitality and CGA Quarterly Tracker reveals that hospitality enjoyed £17.3bn (121%) final quarter growth in 2021 compared to the same period the year before. However, that is still down 32.3% in the 12-months to the end of last December versus the 12-month period ending December 2019. That is the equivalent of a £43bn loss across hospitality in 2021 against expected 2019 levels – the last full year with which to compare, after 2020’s lockdowns.

UKHospitality is pressing the Government to keep VAT at 12.5% beyond April, and last week gave it also gave its backing to Hospitality Rising, a planned £5m industry-wide drive to recruit the 400,000 people needed to ease the staff shortage crisis.

Category: Coronavirus, Editors' Picks, News
Tags: hospitality, Kate Nicholls, UKHospitality