Summer VAT Cut to Family Days Out Poised to Boost UK Hospitality, New Findings Show

The Government’s VAT cut for family days out is poised to boost UK hospitality as consumers plan to take advantage of the cost savings and go out more this summer, according to new research from RSM UK’s Consumer Outlook.

RSM’s survey of 2,000 consumers found that 4 in 10 families plan to go out more this summer (41%) due to the Government’s Great British Summer Savings scheme which includes a temporary reduction in VAT for children’s activities and meals – indicating a welcome boost to hospitality.

The move seems to have encouraged all families, with 44% of households with an income between £20k to £40k planning on more family days out, nearly a third (29%) with an income between £40k to £80k and then jumps to over half (52%) of families with a household income of more than £80k.

Saxon Moseley, head of leisure and hospitality at RSM UK said: “With many households continuing to watch their spending, a VAT cut on family days out could provide a timely boost to hospitality businesses this summer by making leisure activities more affordable.

“That said, the success of the policy will depend on how much of the saving can realistically be passed on to consumers. Restaurants face an uphill task to update systems and re-print menus within a tight timeframe and given it only covers the summer period, some may feel the administrative burden outweighs the benefits. However, leisure operators such as theme parks and cinemas are better placed to update ticket pricing at short notice.

“Our data indicates that for businesses that embrace the changes they could reap the benefits with families looking for value this summer.

“In addition, with the industry calling for the government to go further and permanently cut VAT on hospitality, the temporary measure this summer could be a good trial to demonstrate the wider impact reforms could have.”