Hospitality remains an ‘industry in peril’, UKH warns

It comes as annual sales remain £60bn below 2019’s £132bn

The hospitality sector is ‘an industry in peril’ according to the latest edition of the UKHospitality and CGA Quarterly Tracker, which has revealed both Q3 2021 sales and full 12-month figures are nearly half what they were over the same period pre-pandemic.

The data shows a 45% drop in sales for the 12 months to end-September 2021 compared to year to end-September 2019, before Covid-19 struck, and annual sales remain £60bn below 2019’s £132bn annual turnover.

However, UKH reports that “the sector is proving its mettle” with signs that given the right support it could return to strength and drive economic growth and job creation.

This year’s Q3 sales indicate a 73% growth rate compared to the same quarter in 2020, which reflects the benefit of removing restrictions.

UKHospitality chief executive Kate Nicholls said: “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.

“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.”

She added: “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.

“Given all the above, the Government must look at implementing measures to support the industry. The most effective of these would be to rethink the cap on business rates relief and maintain the current lower 12.5% of VAT for the sector after April next year when it is set to return to 20%.”

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