Business investment in the hospitality industry rose 8.9% on an annual basis in the third quarter of last year as Covid optimism began to spread, according to the latest ONS data.
This is up from the £972m in Q2 2021 and represents a quarterly improvement of 1.6%, and a 44% recovery since the second quarter of 2020, when the sector was worst hit by lockdowns.
However, Catax said the industry remains 23.8% down on the sums invested in Q3 2019, and far off the £1.6bn recorded in the final quarter of that year, ordinarily a “very profitable time of year” due to Christmas parties and events.
The sector performed better than the UK as a whole in Q3 2021, and for the second quarter running. Overall business investment in the UK fell by 2.5% in the third quarter, although it still grew by 2.6% on an annual basis.
UK GDP increased by 1.1% in Q3 — leaving it just 1.5% below where it was pre-pandemic (Q4 2019)3.
The ONS business investment statistics are an indication of net capital expenditure by UK businesses, which includes spending on items such as plant and machinery, transport equipment, software and buildings.
Mark Tighe, CEO of business tax relief consultancy Catax, said: “The hospitality sector continues to bounce-back from its tumultuous 2020, but is still fighting its way back to pre-pandemic levels.
“With the sector suffering from cancellations and lost profits during what should have been its most prosperous period in the run-up to Christmas, the final quarter of 2021 is unfortunately unlikely to reach the £1.6bn figure set in the last months of 2019.”
He added: “However, consumers have shown a hunger to return to hospitality over the last 18 months and, if that continues, then there is every reason to think the sector could cross the billion barrier in the first or second quarter of this year.”