Hospitality sector expected to employ fewer people in 2023 than in 2019

By BigHospitality

- Last updated on GMT

Hospitality sector expected to employ fewer people in 2023 than in 2019

Related tags: Employment, Restaurant, Public house

The hospitality sector will take longer than most other sectors to recover jobs lost in 2020, employing substantially fewer people in 2023 than it did in 2019, according to the latest forecast from consultancy firm EY.

Employment in the hospitality sector is predicted to fall by the equivalent of an annual average of 1.39% by 2023 compared with 2019, according to EY’s Regional Economic Forecast, behind manufacturing (down1.55%) and water and waste management (down 1.50%).

“The pandemic has resulted in many businesses having to significantly restructure their cost base. With payroll the biggest single cost for most businesses, this may mean some will face tough decisions around their longer-term headcount,” says Christian Mole, EY’s UK&I head of hospitality and leisure.

When measured by Gross Value Added (GVA), the hospitality sector is also forecast to be smaller in 2023 than it was in 2019, and is expected to see the equivalent of an annual average decline of 1.36%.

By comparison, the total UK economy is forecast to grow by the equivalent of 0.14% per year.

“There is no doubt that hospitality is one of the sectors most adversely affected by the COVID-19 pandemic,” says Mole.

“Social distancing and lockdown measures significantly affected trading levels, adding to pre-existing challenges facing branded restaurants in particular, including over-supply and unsustainable rents.

“Pubs and hotels, in contrast, entered 2020 in robust health, but have faced disruption to the critical pre-Christmas period, with wet-led pubs and bars particularly exposed.”

The forecast shows the hospitality sector will see regional inequalities, with the largest declines in employment found in the South West of England and the West Midlands. The regions likely to see the lowest declines in employment are London and the South East.

Hospitality businesses in London and the South East are also predicted to bounce back more quickly than those in other parts of the country.

“In contrast to previous downturns, London has been one of the most affected cities in the UK, reflecting the pandemic’s impact on international tourism and business travel. But in the longer-term, we expect London to recover to pre-COVID levels of activity,” says Mole.

“While the sector is forecast to have a smaller footprint in the future, the businesses that are resilient enough to survive may ultimately emerge to become healthier and better positioned for long-term growth.”

 

Related topics: Trends & Reports

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