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UK hospitality takes a £30bn tumble

Published:  28 July, 2020

The closure of the hospitality industry between April to June left a £30bn hole in the British economy, it has emerged.

The figures, from CGA's UKHospitality Tracker, show that UK’s hospitality sector saw sales plummet 87% in the second quarter of 2020 - the equivalent of nearly £30bn in lost revenue.

Sales from the three months of lockdown fell from £34.2bn in 2019 to only £4.6bn in 2020, showing the "catastophic" impact of lockdown on Britain’s world-class hospitality industry. 

While sobering, the figures are not unexpected, as bars and restaurants were ordered to close by the government on March 20.

The challenge, as Tsewang Wangkang, co-founder and CEO of hospitality loyalty platform, Embargo, points out, is now to secure jobs and revenue for the “one in ten Britons employed in the hospitality sector”. 

He adds: “The government’s business rates holiday, VAT cuts and Eat Out to Help Out scheme are all positive steps to help the industry recover. But what will happen to the industry once these initiatives come to a close? 

“Hospitality businesses – particularly restaurants, bars and coffee shops – must find smarter ways to attract and retain customers. These businesses must adapt to the ‘new normal’ and realise that it is imperative for them to identify, engage with and reward loyal customers. It is critical that businesses take steps to understand the customers better to drive repeat business in a cost effective way. There is no longer any room for complacency. Hospitality businesses must act quicker and smarter if they are to thrive again.”

The UKH Tracker combines data from all segments of hospitality, and its data confirms the "enormous and disproportionate" impact of lockdown on the industry, CGA said. Hospitality contributed £133.5bn to the UK economy in 2019, following 3.9% growth. But the rolling annual value of the sector has now dipped below £100bn, with 12-month sales to the end of June totalling £97.2bn. The cliff-edge drop signals the pressing need for extensive and sustained support over the rest of 2020 and beyond.

Kate Nicholls, CEO of UKHospitality, said: “These latest figures highlight how precarious the present situation is. While it’s great that some businesses are trading again, for many opening their doors remains unviable, while some parts of hospitality are still legally required to stay closed. We are only on the very first steps in a long recovery. These figures substantiate our message that businesses still need support from Government, if we want to avoid more business failures and job losses.”