UK hospitality industry yet to recover to pre-pandemic trading levels

The UK hospitality industry is still yet to recover to pre-Covid trading levels with businesses 'fighting on all fronts’ for survival, new research shows.

Sales across the sector rose to £31.6b in the three months to the end of September, a 73% increase on the same period last year but 10% down on the summer of 2019, according to the UKHospitality and CGA Quarterly Tracker.

Kate Nicholls, chief executive of UKHospitality, warned that recovery was “painfully slow” with operators struggling with staffing shortages, supply chain issues and soaring costs.

Sales over the 12 months to September were £60b down on the same period in 2019, a 45% drop.

Nicholls said: “Ours is an industry in peril, and this latest data reflects a sector fighting on all fronts for survival.”

UKHospitality estimates that the sector has lost almost 700,000 jobs since March 2020 and is currently seeing 10% vacancy rates, representing a shortage of around 200,000 staff across the UK.

Some 9,900 licensed venues closed between March 2020 and September 2021, representing 8.6% of the market, according to the CGA & AlixPartners Market Recovery Monitor.

Earlier this week Nicholls told MPs many hospitality businesses are facing an “intense squeeze” on margins around Christmas, with some expecting to have to raise prices for consumers two or three times before April 2022.

She called on the government to maintain the current 12.5% VAT rate beyond April next year, when it is due to rise to 20%, and lift the £110,000 cap on business rates relief to help larger operators.

“If this support isn’t put in place sooner rather than later, then consumers will find themselves paying higher prices, hundreds of hospitality businesses will collapse and thousands of jobs will be lost,” said Nicholls.

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