Pandemic slashes hospitality turnover by 30%

Consumer spending on hospitality and turnover in the sector stand at around 70% of pre-pandemic levels.

The stark reality of the devastation that Covid-19 has had on the industry have been laid bare in a new government report, Coronavirus and its impact on UK hospitality: January 2020 to June 2021, published by the Office for National Statistics.

While turnover increased to £6.9b in May 2021, up from £1.2b from the same month a year earlier, the figure is still around 25% lower compared with May 2019.

The best performing sub-sector of the industry throughout the pandemic have been restaurants and mobile food services, which achieved a £3.3b turnover in May 2021, five and a half times higher than what it was in May 2020.

Meanwhile, pubs and nightclubs have been one of the worst affected sub-sectors; turnover in May 2021 was 39% lower than May 2019. Pubs have been less able to offer a takeaway service when closed and have struggled with the impact of earlier closing times and substantial requirements around eating even when open. Nightclubs have remained closed by law since March 2020, only opening today (19 July).

The decline in business levels was highlighted by the number of businesses which furloughed staff. Nearly 1.65 million employees were furloughed in the sector in April 2020, according to data from HM Revenue and Customs. This figure fell to just under 590,000 at the end of May 2021 as businesses started to open up again.

As the country moved through the pandemic, the hospitality sector adapted to the changing restrictions, with the proportion of businesses temporarily closed falling from 81% in the spring lockdown to 54% in the early 2021 lockdown.

The report also said hospitality “may have also been affected by Brexit” but as the end of the transition period coincided with the start of the latest lockdown “it is hard to separate the effects of the two”.

Society of Independent Brewers (SIBA) chief executive James Calder said: “With payments to businesses such as breweries only around half of its pre-pandemic levels and consumer spending at less than 70%, the sector needs further flexibility on VAT, beer duty and other tax debts to make it through the recovery. Even as restrictions are being lifted today, this analysis demonstrates it will take a very long time for consumer confidence to return and for businesses to again turn a profit.

“SIBA believes that this is the time for the government to announce sector boosting policies such as a lower rate of beer duty on draught beer and positive reform of Small Breweries’ Relief to save our local pubs and small breweries.”

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