Professional Comment

UK Hospitality Sector Eyes Holiday Season Spending Spreee

By Kunal Sawhney, CEO of Kalkine (

Even with the repeated disruptions in the businesses and scale of operations, the hospitality industry of the Untied Kingdom is looking forward to a considerable recovery in the upcoming holiday seasons, effectively capitalising on the consumer spending spree. As the challenges continue to evolve following the unforseen events perpetrated by the Covid-19 pandemic, the enterprises operating within the industry are reinforcing their systems that can withstand minor hiccups, and help them to get back to profitability.

Meanwhile, the hospitality industry seeks additional monetary assistance which can cushion the business as most of the companies are grappling with broken balance sheets, high debt obligations and other challenges that have surfaced after the widespread emergence of infections linked to the Delta variant.Furthermore, the sector is urging for a permanently lowered rate of VAT for the business under the umbrella of the hospitality and tourism industry.

The uncontrolled aftermath of pandemic has severely impacted the industry with the businesses losing more than two-third of their usual revenues. Eroding toplines have subsequently led to massive cost reduction measures including the lay-offs an curtailed operations. As a result of historically low revenues, the businesses were forced to defer the scheduled repayments.

The situation for some businesses worsened, so much so that they were unable to oblige the ‘going concern’ principle, due to the stern orders from the government of complete shutdowns. As a result headcount even after they are allowed to reopen on full scale due to inadequate funds and the persistent problem of staff shortages.

The Government-backed furlough scheme and other preventive measures have undoubtedly helped the businesses to sustain their operations during the challenging times. But a constructive stimulus is required for the industry as they resume their operations as a large section of businesses are still finding it hard to recognise pre-pandemic levels of revenues due to limited operations.

It turns out to be very difficult for the businesses when consumers are looking forward to services, but the corporations are not able to manage it due to market-wide challenges of insufficient raw materials, patchy supply chain systems and sparseness of chefs and other support staff needed in various consumer-facing businesses.

As the UK hospitality sector supports 10% of the employable workforce in the country, alongside contributing 5% to the national GDP, it becomes very crucial that all the businesses find a pathway to fruitful recovery as early as possible.

The contribution of business towards the national economic growth can be ramped up only after the enterprises are adequately equipped with the resources. With the holiday season approaching ahead, the business are eagerly waiting to maximise the revenues which can productively steer them through the residual consequences of the pandemic.

However, the termination of the furlough scheme is likely to impact the cumulative spending as some businesses will further discharge the surplus workforce, effectively giving rise to the unemployment levels. Nonetheless, the aftereffect is expected to be short lived as the vaccines are already mounting over the pre-pandemic highs.

Additionally, the immunisation programme for the vulnerable patients, facilitating a booster dose, will definitely supplement the protection against the Delta variant and its sub-lineages. The additional jab will substantially uplift the consumer’s confidence, when it comes to stepping out of their homes and visiting various hospitality settings.