The hospitality and foodservice sector will lose £23bn in the second half of 2020, achieving only 53% of 2019 income levels, according to a new report.
Produced by Simon Stenning, founder of FutureFoodservice, the ‘Immediate Future’ of the UK Hospitality/Foodservice market’ report covers the 18 months from July 2020 to the end of 2021, providing detailed forecasts for each sector by number of outlets that will be open by the end of the year and the level of turnover to be expected.
It forecasts that the industry will see a £10bn fall in revenues, down to only £88bn, 10% lower than in 2019. However, as a result of coronavirus 22% of all hospitality outlets will not be open by the end of 2020.
The long-term growth forecasts for the industry are that it will recover to 2019 levels by 2025 at the latest, as the economic impacts linger, but that it will eventually increase to £108bn by 2030.
Stenning said: “The hospitality industry faces enormous challenges and a worrying situation of losing 47% of normal revenues. It is imperative that the government provides significant levels of support given that it is such an important employer and tax generator.
“This is a cautious, not-overly ambitious forecast, but not the worst-case scenario. All sectors of the industry are affected, and it will take time for consumers to revert to their previous behaviours.”
He added: “The incredibly hard-working, caring and hospitable nature of the industry will do its utmost to professionally manage the welcoming back of customers and provide safe spaces for us to enjoy our social lives again.
“However, economic, consumer, profitability, safety and locational factors mean that the industry has to face challenges never encountered before.”
The report also highlights the effects of the contraction on UK plc. Stenning continued: “The significant fall of £23bn in 2020 alone implies a fall in VAT of £4.6bn, losing the government significant tax revenues, along with an increase in social costs emanating from the loss of employment from an industry that directly employs over three million workers.”