Covid wreaks £115bn devastation on hospitality
The Covid-19 pandemic has cost the UK hospitality sector £114.8 billion (US$156.3bn) in lost sales over two years.
New data from trade body UK Hospitality revealed that pre-pandemic, the hospitality industry would generate up to £140bn (US$190.6bn) annually in the UK. However, it has lost 43% and 45 full weeks of sales since March 2020.
Furthermore, the sector is facing rising costs, and UK Hospitality is urging the government to support the on-trade by keeping VAT at 12.5%.
Kate Nicholls, UK Hospitality chief executive, 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 [from] 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.
“Who’d have thought two years ago that we’d now be looking at a once vibrant and dynamic industry brought to its knees? Tragically, in addition to the devastating monetary losses are the damaging and long-term psychological effects on thousands of people in our sector who have lost their livelihoods and, in some cases, seen their life’s work ruined.
“But two years on, and 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 most recent edition of the UK Hospitality and CGA Quarterly Tracker showed hospitality enjoyed £17.3bn (US$23.6bn), or 121%, growth in the fourth quarter of 2021, compared with the same period in 2020.
However, that represents a drop of 32.3% in the 12 months to the end of December 2021 when compared with the year ending December 2019. This equates to a £43bn (US$58.5bn) loss across hospitality in 2021 against expected 2019 levels.