Two years of lockdowns have cost the hotel and hospitality industry nearly £115 billion, a major study has revealed.
The research, published by UKHospitality, is the first to highlight the devastating impact of the coronavirus pandemic on the industry.
According to the report, rising costs and social distancing restrictions have cost the sector £114.8 billion in revenue since March 2020 – equivalent to around 45 full weeks of sales and 43 per cent less than what would be expected during “normal times”.
Data for the fourth quarter of 2021 suggests signs of recovery, however. Revenue across the sector grew by 121 per cent to £17.3 billion in the three months to December, compared to the previous period.
But figures for the year are still down 32.3 per cent compared to the 12 months to December 2019.
UKHospitality Chief Executive, Kate Nicholls, said the pandemic has caused “catastrophic losses”.
“These figures lay bare the utter devastation that 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,” she said.
The report comes ahead of the temporary reduced rate of VAT for hospitality being withdrawn this April.
The VAT rate for certain supplies of food, drink, accommodation, and admissions was reduced to five per cent in July 2020, before transitioning to 12.5 per cent on 30 September 2021. This rate will remain in place until 31 March 2022.
Commenting on the scheme, Ms Nicholls added: “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 Covid loans 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.”
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