Sector 'brought to its knees' by £115bn in losses

18-Feb-2022 - Last updated on 18-Feb-2022 at 09:25 GMT

Industry brought to its knees: hospitality industry has lost almost £115bn since the start of the Covid pandemic (Credit: Getty/ Adam Gault)

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The hospitality industry has lost almost £115bn in the two years since the start of the Covid pandemic.

Since March 2020, the sector has lost 45 full weeks of trading, resulting in sales losses of £114.8bn within the sector, which would typically generate up to £140bn-a-year.

In light of these figures and to support the sector, UKHospitality (UKH) has urged the Government to keep VAT at its current reduced rate of 12.5% instead of increasing VAT to 20% in April.

UKH chief executive Kate Nicholls said: “These figures lay bare the utter devastation two years of this terrible pandemic has wreaked on the third largest private sector employer in the UK, with thousands of businesses closed, many on the brink of collapse, and countless jobs lost.

Devastating losses

“The last thing operators need, and which a lot of them simply wouldn’t survive, is a VAT increase.

“Businesses big and small have been left with depleted cash reserves and crippling debt as well as contending with a gaping hole of 400,000 job vacancies, as more than 80% of hospitality businesses report they have roles to fill.

“Tragically, in addition to the devastating monetary losses are the damaging and long-term psychological effects on thousands of people in our sector who have lost their livelihoods and, in some cases, seen their life’s work ruined.”

The latest edition of the UKH and CGA Quarterly Tracker revealed hospitality saw a £17.3bn (121%) final quarter growth in 2021 compared to the same period the year before.

Industry brought to its knees

However, this was still down 32.3% in the 12-months to the end of last December against the 12-month period ending December 2019, the equivalent of a £43bn loss across hospitality in 2021 against 2019 levels.

Nicholls added: “Who’d have thought two-years-ago we’d now be looking at a once vibrant and dynamic industry brought to its knees?

“But two years on, and with all restrictions about to end, there are signs of hope and recovery. With government support, hospitality – which is full of energetic, creative and entrepreneurial people – must be at the vanguard of the UK’s wider post-pandemic recovery."