Two years of Covid 'does £115bn damage' to hospitality industry

By James McAllister

- Last updated on GMT

Two years of Covid 'does £115bn damage' to hospitality industry

Related tags: ukhospitality, Coronavirus, Vat

The impact of the Covid-19 pandemic has led to a loss of nearly £115bn across the hospitality sector, according to new figures from UKHospitality.

Hit first and hit hardest by Coronavirus, the sector has racked-up £114.8bn sales lost versus what was expected for 2020/21. With a full 24-months of data available, hospitality, which in normal times generates up to £140bn-a-year, has lost 43% and 45 full weeks of sales since March 2020.

“These figures lay bare the utter devastation that two years of this terrible pandemic has wreaked on the third largest private sector employer in the UK, with thousands of businesses closed, many on the brink of collapse, and countless jobs lost," says Kate Nicholls, chief executive of UKHospitality. 

“Businesses big and small have been left with depleted cash reserves and crippling debt as Covid loans as well as contending with a gaping hole of 400,000 job vacancies, as more than 80% of hospitality businesses report they have roles to fill.

“Who’d have thought two-years-ago that we’d now be looking at a once vibrant and dynamic industry brought to its knees? Tragically, in addition to the devastating monetary losses are the damaging and long-term psychological effects on thousands of people in our sector who have lost their livelihoods and, in some cases, seen their life’s work ruined."

On top of these catastrophic losses, UKHospitality notes that the sector is facing rising costs across the board and is again urging the Government to continue its support to the industry by keeping VAT at its current level of 12.5%, rather than returning it to the pre-pandemic level of 20% in April as is currently planned.

"The last thing operators need – and which a lot of them simply wouldn’t survive - is a VAT increase," adds Nicholls.

With the final Covid restrictions about to end, Nicholls goes on to say that there are signs of hope and recovery for the sector.

The latest edition of the UKHospitality and CGA Quarterly Tracker reveals that hospitality enjoyed £17.3bn (121%) final quarter growth in 2021 compared to the same period the year before.

However, that is still down 32.3% in the 12-months to the end of last December versus the 12-month period ending December 2019. That is the equivalent of a £43bn loss across hospitality in 2021 against expected 2019 levels – the last full year with which to compare, after 2020’s lockdowns. 

"With Government support, hospitality – which is full of energetic, creative and entrepreneurial people – must be at the vanguard of the UK’s wider post-pandemic recovery," she says.

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