By Kunal Sawhney, CEO of Kalkine (

The UK’s hospitality sector is finally witnessing a bounce-back phase from the turbulence created by the pandemic.The emergence of the Omicron variant had though put some pressure on the UK’s hospitality sector once again.


There have been some positives for the sector as well; investment volume in the sector jumped by 9% to £988 million in the third quarter of 2021, up from £907 million in the same quarter of 2020.The surge also indicates the 1.6% improvement from £972 million in the second quarter of 2021.The overall hospitality sector performed better in the third quarter, as the UK’s total investment fell by 2.5%.

The UK’s hospitality sector missed out £3 billion in sales during the festive season in December 2021 due to a surge in omicron cases, as sales slumped by 60% on Christmas Day, 27% on New Year, and 31% on Boxing Day, as compared to 2019.

Hospitality operators are urging for a permanent reduction in value-added tax (VAT) and business rates after the loss of over a fifth of their customers and a 40% drop in sales over the Christmas and New Year season.

In December 2021, Chancellor Rishi Sunak had announced a £1 billion emergency support fund to help the hospitality and leisure sector hit by the rising fear of the new Omicron variant.The sector may apply for cash grants of up to £6,000 per premises, which also includes more grants to support small and medium-sized businesses in covering costs of statutory sick pay. But data shows the support package will be no match for the huge loss that the hospitality sector is facing for the last two years.The UK’s Hospitality sector warned that failure to deliver emergency grants could lead to cut back staff and operations.


The year 2021 had been a rollercoaster ride for the hospitality sector due to HGV driver shortages, supply chain crisis, shortage of carbon dioxide, wages and utility bills and higher raw material prices that posed serious challenges for the sector. However, experts believe the year 2022 will be brighter for the sector, as the last two year shows that as restrictions ease and customer confidence returns hospitality business recover swiftly. But, with the rising inflation and cost of raw material and other bills, customers may see a rise in prices. According to the founder of Future Foodservice, Simon Stenning the total sale of the hospitality sector, excluding accommodation, are expected to hit £95 billion in 2022, which remains below pre-pandemic level.

Not only Omicron but there are also other reasons to worry about such as rising inflations that is expected to increase cost than the normal pre-pandemic level of £60-£65 million, due to an increase in energy prices and statuary wage rate. Further, higher costs of living may persuade customers to cut their spending.

There has been a sharp decline in hospitality companies listed on the London Stock Exchange, and some are even down to half of their pre-pandemic levels, which has raised concerns for the investors of the sector.Though lower level can be seen as an opportunity as well, with customers flocking back to hospitality venues.