Hospitality sector 'in peril’ as comparable revenues halve
Both Q3 2021 sales and full 12-month figures for the hospitality sector are nearly half what they were over the same period pre-pandemic, according to the latest edition of the UKHospitality and CGA Quarterly Tracker, with annual sales £60bn below 2019’s £133bn annual turnover.
The data shows a 45% drop in sales for the 12 months to end-September 2021 compared to year to end-September 2019, before the Coronavirus pandemic hit, with the hospitality sector recording £73.1bn sales, compared with £133.6bn sales in 2019.
In Q3 (July to September) 2021 the hospitality sector produced revenues of £31.6bn, an increase of 73% vs Q3 2020 (£18.3bn) but a drop of 10.1% on Q3 of 2019, when revenues were £35.1bn.
“While things are certainly moving in the right direction, recovery remains painfully slow and there are massive gaps between the numbers now and where they were before Covid-19 wreaked its havoc,” says UKHospitality chief executive Kate Nicholls.
“Ours is an industry in peril, and this latest data reflects a sector fighting on all fronts for survival. Since trading restrictions were lifted, operators have been plagued with a labour crisis and supply chain issues, not to mention soaring inflationary costs.
“In addition, VAT has risen and the cap on business rates, announced in the last budget, penalises the most successful businesses in the sector as it means no business can claim more than £110,000. This means even smaller operators, with just three or four sites, will miss out on relief.
Between March 2020 and September 2021, the licensed market lost 9,900 sites in net closures, the equivalent to a loss of 8.6% of venues, according to the CGA & AlixPartners Market Recovery Monitor, with nightclubs and guest houses among the worst affected
Nicholls has renewed her calls for more Government support, including a rethink of the cap on business rates relief and maintaining the current lower 12.5% of VAT for the sector after April next year, when it is set to return to 20%.
“If this support isn’t put in place sooner rather than later, then consumers will find themselves paying higher prices, hundreds of hospitality businesses will collapse, and thousands of jobs will be lost,” she says.
