Hospitality sector makes 'significant contribution' to UK economy growth

By Michelle Perrett

- Last updated on GMT

Industry contribution: the hospitality sector made up 40% of the UK's economic growth from the first to the second quarter of 2021, figures have found (image: Getty/PM Images)
Industry contribution: the hospitality sector made up 40% of the UK's economic growth from the first to the second quarter of 2021, figures have found (image: Getty/PM Images)

Related tags: Economy, Finance, Ons, ukhospitality, Poppleston allen

The hospitality sector has made a “significant contribution” to the latest Office of National Statistics (ONS) figures that showed that the UK economy grew by 4.8% in Q2 2021 as coronavirus restrictions were lifted.

Trade association UKHospitality said that further analysis as part of the UKHospitality (UKH) Quarterly Tracker​, produced by CGA, shows the significant contribution made by the sector, which was responsible for 40% of the UK’s total economic growth from Q1 to Q2 2021.

“These figures not only show the importance of the hospitality sector to the UK economy, even in the severely restricted and beleaguered state it was in during the second quarter of this year, but also demonstrate its real potential to power a wider economic recovery now trading restrictions have finally been eased after almost 18 months,” said UKH chief executive Kate Nicholls. 

Multitude of challenges

She added: “However, this was not a period characterised by booming sales and plain sailing for the sector, but many weeks where businesses were still operating under strict restrictions and experienced a multitude of challenges brought about by the pandemic. What should be remembered is the sector collectively lost more than £100bn in sales across the course of the pandemic – a truly staggering figure.” 

Nicholls again urged the Government to help safeguard the future of the sector and its recovery. 

“Measures we are calling for include the urgently needed reform of business rates and a permanently lowered rate of VAT,” she added. 

This view was supported by licensing solicitors Poppleston Allen. 

Making up for lost time

"Customers returning to hospitality venues as restrictions lifted was key to driving Britain's recovery, underlining the vitally important contribution the sector makes to the UK economy,” said Graeme Cushion, partner at Poppleston Allen. 

"While Covid-19 has permanently altered the way we work and shop, it's clear one pre-pandemic way of life the public were happy to return to quickly was socialising in pubs and restaurants, making up for lost time in terms of spending disposable income saved during lockdown."

He added that the figures also suggested that a vibrant hospitality and leisure sector would be one of the main drivers in ensuring footfall returns to town and city centres with retail and even work spaces set to benefit. 

“Whilst retail has been the historical driver of footfall for the hospitality sector, our new post-Covid era might see this reversed, with hospitality becoming the saviour of town and city centre retail,” he said. 

Related topics: Legislation

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