Hospitality industry in the UK

The hospitality industry primarily refers to food and accommodation services industries. This means restaurants, cafes, pubs, bars, catering, hotels, camp sites and other accommodation.

In 2019 the hospitality sector contributed £59.3 billion in Gross Value Added to the UK economy, around 3.0% of total UK economic output.

In the three months to September 2020, there were 2.38 million jobs in the hospitality sector in the UK, representing 6.9% of total UK employment.

There were 223,045 hospitality businesses in the UK as of 1 January 2020, 3.7% of all UK businesses. Of these, 137,225 were employers, 10% of the UK total. Hospitality businesses represent 3-5% of businesses in each country and region.

The excel sheet attached to this briefing allows users to view the number of accommodation and food/beverage businesses and employment by Parliamentary constituency and local authority area. The Library briefing on Pub Statistics provides data on the number of pubs by constituency.

Impact of Covid-19

The food & accommodation sector has been one of the hardest hit sectors by the pandemic. Restrictions on trading have significantly impacted hospitality business turnover. Ongoing fixed costs and accumulating debt alongside persistent low revenues and cash reserves are a major concern for the sector.

Economic output in the hospitality sector was down 90% in April 2020 compared to February 2020. Output recovered over the summer of 2020, boosted by easing coronavirus restrictions and the Eat Out to Help Out scheme in August, but was still below pre-pandemic levels. Output declined again from September as Covid-19 cases rose and restrictions were imposed. 

As of early March (22 Feb–7 March 2021) the ONS reported that 43% hospitality businesses were trading, compared to 74% across all industries.  55% of hospitality businesses had temporarily paused trading, compared to 24% across all industries. Almost 1 in 5 hospitality businesses (19%) had “low confidence” that their business would survive the next 3 months.

From January-March 2020 to July-September 2020, the number of workers in the sector fell by 6% (147,000). However, the pandemic has not yet resulted in the expected increase in unemployment, partly due to the Coronavirus Job Retention Scheme (CJRS).

The number of jobs on furlough under the CJRS in the food & accommodation sector peaked on 10 April 2020, at 1.6 million jobs. From April to October, the number of furloughed jobs fell significantly. However, there have been increases due to two separate national lockdowns since October.

On 31 January, 56% of eligible jobs in food & accommodation were furloughed under the CJRS, compared to 16% across all industries.

Support for the hospitality industry

The hospitality industry has seen high take-up of UK Government business support schemes such as the CJRS and business loans.

The Government has also provided support schemes targeted to the hospitality industry, such as the Eat Out to Help Out Scheme, reduced VAT rate, a business rates holiday for 2020/21 (extended to 30 June 2021) and a series of small business grants.

Separate grant schemes and business rates relief apply in the devolved Administrations.  

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