Professional Comment

Hospitality Needs Appropriate Government Support To Prosper

By Kunal Sawhney, CEO of Kalkine (

UK’s Hospitality sector that once started recovering from the onslaught of the Delta variant was again hit by a wave of cancellations as parties and events were called off amid concerns about the emerging Omicron variant just ahead of Christmas, which led to huge losses for the sector. But now, as the Omicron cases are believed to have peaked, there is an urgent requirement to support the sector, which otherwise could result in a hit to the economy.


According to a recent analysis of Office of National Statistics (ONS) data by two software startups, Storekit and Stampede, the UK’s hospitality sector has grown by around 10,000 businesses since March 2019, but the number of bars, pubs and clubs declined during the pandemic.The analysis says that there are more hospitality businesses in UK than the pre-pandemic level as there were 10,650 more restaurants in 2021 as compared to March 2019 and 3,650 more than in March 2020.

The analysis also revealed that catering and takeaway businesses grew by 2,105 and 2,305 units respectively since 2020, and restaurants had a net growth of 1,710 business units over the same period. However, the analysis predicts in the near future the UK could be left with only 5,000 or less nightclubs in operation as the declining trend can be seen since 2010 when around 10,040 clubs were registered. But, by 2015, the numbers had fallen to 8,370 and further to 6,985 by 2021. The reasons that led to the decline in Pub operations have been termed as changing economic and cultural conditions, financial crisis during the pandemic and high beer duty.

However, after a tough 2021 year, the investment volume in the hospitality sector jumped by 9% to £988 million in the third quarter, indicating that as restrictions ease and customers build confidence, there is a strong increase in demand in the hospitality sector. Also, the Omicron cases has begun to fall, enabling the UK government to lift the Plan B restrictions back, allowing indoor and outdoor events and venues to re-open and operate without restrictions, and covid passes will no longer be compulsory at large events.


Although many of research shows that the hospitality sector has changed and matured over the last couple of years, but the way it was devasted during the pandemic left many loose ends wide open, showing the vulnerability of the sector that needs constant support from the government.

In December 2021, after the emergence of the Omicron variant, the UK government had announced a £1 billion emergency fund to the hospitality sector, offering up to £6,000 cash grants per premises, which can’t be called sufficient against the huge loss of £10,335 per week that the sector faced just before Christmas.

The last leg of restriction, popularly known as ‘Plan B’, calls for more, urgent financial help for the sector. Businesses that rely on footfalls will require more handholding, which could be in the form of permanent reduction in value-added tax (VAT), which is currently 12.5% and business rates which is currently 66%, until 31 March 2022, with an upper limit of about £2 million.The local government needs more involvement to help businesses plan and reorganize their businesses.