Hospitality Faces Long Road To Recovery After Losing £100bn Of Sales During COVID-19

Hospitality businesses have suffered a £100.2 bn drop in sales from pre-pandemic levels in the 15 months since the start of the COVID-19 pandemic, the latest edition of the UKHospitality Quarterly Tracker with CGA reveals.

Prolonged closures and severe trading restrictions limited total sector sales in the 12 months to end-June 2021 to an estimated £59.8 bn—down by £72 bn from the total of £131.9 bn in the 12 months to end-June 2019. Adding on the second quarter of 2020, this brings total sales in the last 15 months to £64.4 bn, £100.2 bn below the total of £164.6 bn in the 15-month period to June 2019.

The latest quarterly figures are a notable improvement on recent year-on-year comparatives, following the easing of restrictions for restaurants, pubs, bars, hotels and entertainment venues since mid-April, compared to a period when hospitality was almost totally shut in 2020. As a result, estimated sales in the three months to end-June 2021 totalled £18.4 bn, compared to £4.6 bn in the same quarter of 2020. The sharp increase shows that hospitality’s recovery is underway, and that strong consumer demand for the sector can help to power the UK’s wider economic revival.

However, the £100.2 bn shortfall in sales from pre-pandemic levels indicates the seismic impact of COVID-19 on the UK’s hospitality sector. While the easing of restrictions from Monday 19 July has given businesses greater freedom to trade—and allowed some to open for the first time in 16 months—many now face major challenges including debt burdens, staffing crises and fragile consumer confidence.

Kate Nicholls, CEO of UKHospitality, said: “These figures confirm in stark terms the huge impacts on the hospitality sector during Covid. Furthermore, while we hoped to be close to normal trading from 19 July, in reality hospitality businesses instead remain impeded, by the ongoing ‘pingdemic’ crisis, the pre-existing staffing shortage and the looming shadow of vaccine passports over some of the sector.

“History tells us that hospitality can be a leading economic force in driving an economic recovery but to do so in current conditions and with huge debt accruals, it will need further support to push it over the line and back to pre-Covid trading. Extension of the business rates holiday, speedy resolution to the rent problem and retention of the lower VAT rate indefinitely are more crucial than ever to safeguard jobs and businesses.”