UKH celebrates recovering, yet warns of challenges ahead

By Amelie Maurice-Jones

- Last updated on GMT

Muted celebrations: UKHospitality chief executive Kate Nicholls
Muted celebrations: UKHospitality chief executive Kate Nicholls

Related tags: Finance, Legislation, Pubco + head office, Multi-site pub operators

The Office of National Statistics’ latest labour market overview, which showed industries continuing to recover from the pandemic, was “positive news” for hospitality, yet the sector was still fragile, according to UKHospitality (UKH).

The latest Labour Force Survey (LFS) estimates for November 2021 to January 2022 revealed a continuing recovery in the labour market, with a quarterly increase in the employment rate and a decrease in the unemployment rate. 

Data showed jobs in the hospitality sector to be up by 252,000 over the past 12 months and unemployment substantially down, now at 4% and therefore below pre-pandemic levels.

Positive news

UKH chief executive Kate Nicholls said: “This is positive news for our beleaguered industry and clearly demonstrates what a vital role our businesses play in the UK’s economic recovery.”

The overall UK employment rate increased by 0.1 percentage points on the quarter to 75.6% and full-time employees drove the increase in the employment rate during the latest three-month period, the figures displayed. 

For Nicholls, the data also demonstrated how challenging the labour market remains. The number of job vacancies in December 2021 to February 2022 rose to a new record of 1,318,000, figures showed. This is an increase of 105,000 from the previous quarter, with half of the industry sectors showing record highs. 

What’s more, the number of UK job vacancies in December 2021 to February 2022 rose to a new record of 1,318,000. This is an increase of 105,000 from last quarter, with half of the industry sectors showing record highs. 

Nicholls believed the data showed an increase in the number of people choosing to be economically inactive, indicating a need for flexibility to avoid impacting on the sector’s fragile recovery.

Fragile sector

“The sector remains fragile, however, facing an onslaught of soaring costs including a rise in VAT to 20% next month,” she said.

Indeed, some 60% of operators agreed with Nicholls, voting that keeping the VAT rate permanently low at the Budget would make the biggest difference to business, in a recent snap poll by The Morning Advertiser​.

“If hospitality is to be able to continue to provide jobs and support wider UK recovery and growth then the sector needs further support from the Government. The key to this will be for the Chancellor to keep VAT at 12.5% beyond April,” Nicholls concluded.

Related topics: Rebuilding the Pub Sector

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