UKH: GDP dip highlights ‘economic importance of hospitality’
The industry body cites data published by the Office for National Statistics on 15 January as proof of the economic importance of the hospitality sector and believes it strengthens calls for it to feature prominently in the Government’s reopening plans.
Estimates for November show UK GDP – the financial value of all goods and services – falling by 2.6%, with hospitality – which was shuttered under England’s second national lockdown between 5 November and 2 December – accounting for over a third (0.9%) of the decline.
“This really hammers home how important our sector is to the economy,” UKH chief executive Kate Nicholls explained. “When we were open, albeit with restrictions, in the summer, our return to growth contributed to the economy growing.
“The figures highlight our power as an economic driver and show why we should be at the heart of plans to revitalise the economy.”
Nicholls added hospitality must be prioritised once vaccines have been rolled out to the vulnerable and an exit strategy has been determined.
“We need to be supported properly if we are expected to power economic growth and spearhead the country’s revival,” she said. “The level of support has to reflect the hit that the sector has taken and ensure those hardest hit receive the proper help they need.”
The recent petition for the hospitality sector to have its own dedicated cabinet minister – which was debated in Parliament on 11 January – highlighted that the sector is responsible for around 3m jobs and generates £130bn in activity resulting in £38bn in taxation.
Economy to ‘get worse before it gets better’
The release of the UK’s latest GDP figures followed news reported by The Morning Advertiser that new lockdown restrictions in tandem with stifled economic performance in final quarter of 2020 have left the UK on the brink of its first double-dip recession since 1975.
The British Chambers of Commerce’s latest quarterly economic survey revealed that nearly half of businesses reported declining domestic sales, rising to more than three-quarters for hospitality and catering firms.
This compares to the two-thirds recorded in Q3 2020 but remains below the 94% recorded in the second quarter of 2020.
What’s more, Chancellor Rishi Sunak recently stated that despite forecasts of further economic decline there will be no additional financial support for business hit by coronavirus restrictions before the Budget on 3 March.
Sunak warned that the economy would "get worse before it gets better" and that recently increased national restrictions were necessary to control the spread of Covid-19.
