Business investment in the hospitality industry recovered 45.3% in Q3 having jumped £308m on the previous quarter, analysis of latest official data by R&D tax relief specialist Catax shows.
Total business investment in hotels and restaurants was 7.5% down year on year to £988m between July and September amid the ongoing effects of the pandemic, latest ONS figures released on Friday reveal1.
However, this was significantly better than the performance of UK industry as a whole. Total UK business investment across all sectors dropped 19.2% annually in Q3 2020.
Quarterly UK GDP grew by 15.5% in Q3, however this pace of growth did slow later in the year, with only a 1% rise recorded for Q44. The result was that over 2020 as a whole, UK GDP shrank by 9.9% — the worst performance since modern records began.
Mark Tighe, CEO of R&D tax relief consultancy Catax, comments:
“The hospitality sector starts from a lower base than most areas of the economy when it comes to business investment but it has still done well to bounce back from the lows seen in the second quarter of last year when the sector plumbed depths not seen since 2011, in the teeth of the financial crisis.
“This significant percentage jump in business investment in the third quarter represents a promising rebound for an industry that has been hit like a freight train by the pandemic and repeated lockdowns.
“It will continue to suffer so long as the leisure industry remains shut down but the quick effects of the vaccine drive will hopefully allow the UK to throw off its Covid shackles soon and deliver a speedy return to normal levels of activity as we move through the year.”