December revenue predicted to drop by a quarter

By Rebecca Weller contact

- Last updated on GMT

Crucial trading period: December revenue has been predicted to drop by a further quarter (Credit: Getty/wutwhanfoto)
Crucial trading period: December revenue has been predicted to drop by a further quarter (Credit: Getty/wutwhanfoto)

Related tags: ukhospitality, Coronavirus, Christmas, Finance

The Government need to step in and provide financial help before it’s too late as December revenue for the hospitality sector has been predicted to drop by a further quarter, according to industry body UKHospitality.

Pubs, bars, cafés, and restaurants have already seen trade fall by a third and are expecting a further 22% drop in bookings for December.

Nightclubs fared worse as revenue was already down by a quarter and city centres were particularly hard hit amidst major corporate booking cancellations.

Christmas trade crucial for sector 

UKHospitality chief executive Kate Nicholls said: “Christmas trade is always crucial for the hospitality industry, making up as much as a quarter of the year’s profit for many businesses.

“Last year Christmas was cancelled and so much rested on this December period for businesses already staggering under a burden of debt incurred from the pandemic and facing rising costs across the board.”

However, the predicted figures did not include financial losses incurred by wasted stock, unnecessary labour and other commodities arising from cancelled events and bookings, which may not be covered by insurance.

Prior to the emergence of Omicron and Plan B restrictions, figures showed the industry was on track to reach 95% of pre-pandemic trade levels but consumer confidence has plummeted and businesses now face catastrophic levels of cancellations.

Government need to step in now

Hospitality creates £130bn in economic activity, generates £39bn of tax for the Exchequer and is the 3rd largest private sector employer in the UK; double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined.

Nicholls added: “If operators are unable to trade profitably over the next month, many will simply not survive, and those that do make it through face a return to 20% VAT in April.

“The Government must step in now and provide measures that support the businesses and jobs in the sector, by committing to keeping VAT at 12.5%, suspending business rates payments for the first quarter of 2022 and reinstating recovery grants.”

Related topics: Legislation

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