Professional Comment

Hospitality Sector Likely to Witness quarter of 2020. Quick Turnaround in Q4 2021

By Kunal Sawhney, CEO of Kalkine (

Hospitality sector has been one of the worst hit industries follow- ing the market-wide consequences of the coronavirus pandemic, but, of late, the sector has been encountering severe difficulties which are not prevalent in other jurisdictions.

Businesses operating within the hospitality industry are battling to survive the staff shortage scare, when consumers are more willingly to step out of their homes to visit cafes, pubs, bars, restaurants, and they are looking forward to attending large gatherings, enjoying other leisure services.

There are actually ample job vacancies across all the major sectors with the figures increasing by 35.2% during the June to August period of 2021. In absolute terms, the number of job vacancies breached the 1 million mark for the first time ever, since the authorities started computing the record, in the corresponding stretch.

Of the total rise in vacant positions, the accommodation and food services businesses have witnessed the highest increase in the level of vacancies. Surprisingly, the total vacancies are now 249,000 more than the number of vacancies during the pre-Covid period, January-March quarter of 2020.

 On the contrary, employment levels are invariably rising as the businesses resume their full-fledged operations after the withdrawal of lockdown restrictions and social distancing mandates.

As far as the growth of businesses in the hospitality sector is concerned, all the enterprises are poised to gain from the holiday spending spree in the upcoming quarter.There is a potential likelihood that the business- es will manage to find a way to employ people in many of the hard-to-fill vacancies as people will be looking out for good employment opportunities subsequent to the removal of the government-backed furlough scheme.

The fact is quite evident that the number of payrolled employees are rising at a faster rate across all jurisdictions. As per the ONS data, London, Scotland and the South East were the only authorities with fewer number of payrolled employees in August of 2021 as compared to the levels in the beginning of the pandemic.

Hospitality sector have faced the direct heat of unforeseen repercussions as businesses were immediately told to curtail their operations or to shut entirely if there was any hardening by the government in the scope of pandemic protocols and lockdown restrictions. As a result of multiple disruptions, a large section of enter- prises are still reeling under significant amounts of debts and other credit facilities which have been availed to counterbalance the insufficiency of funds.

he introduction of vaccine passports has been outrightly criticised by the UKHospitality Chief Executive Kate Nicholls.The industry fears that any potential disruption before the commencement of holiday season will have further setbacks for the businesses.

The upcoming quarter will be a make or break for the hospitality sector as businesses will desperately look for avenues that can substantially ameliorate the revenues, so that they can comfortably service the existing debt obligations, as well as the entire quantum required to oblige the employee-benefit expenses.

Any further stimulus from the government in form of direct subsidies or a considerable reduction in taxes is likely to augment the business functions as it will be an added advantage for enterprises alongside the anticipation of higher consumer spending in the final quarter.