The House of Commons Library has published a Briefing Paper entitled “Hospitality Industry and Covid-19″ (that you can download below) and an accompanying Hospitality businesses and employment by Parliamentary constituency and Local Authority Excel Spreadsheet
The Briefing Paper provides current information on the hospitality industry in the UK, the impact of the Coronavirus pandemic and sources of support for the sector. The timing of its publication on 8 January 2021 is linked with a parliamentary debate on 11 January 2021, prompted by:
- a petition supported by more than 200,000 people campaigning for a dedicated Minister for Hospitality, and
- a separate petition on general support for the hospitality industry that had gained about 45,000 signatures.
You can read here a transcript of the debate (that can also be downloaded below).
A summary of the background circumstances behind the Briefing Paper (published on the parliament.uk website) reads as follows:
Hospitality industry in the UK
The hospitality industry primarily refers to food and accommodation services industries. This means restaurants, cafes, pubs, bars, catering, hotels, campsites 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 pub statistics 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. Economic output in the hospitality sector was down 92% in April 2020 compared to February 2020. Output recovered over the summer, 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. Ongoing fixed costs and accumulating debt alongside persistent lower revenues and low cash reserves are a major concern for the sector.
As of late December (14-23 December) the ONS reported that 59% hospitality businesses were trading, compared to 84% across all industries. 41% of hospitality businesses had temporarily paused trading, compared to 13% across all industries.
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, in part due to the Coronavirus Job Retention Scheme (CJRS). The number of jobs on furlough under the CJRS in the food and accommodation sector peaked on 10 April 2020, with 1.6 million jobs on furlough and has been declining since. On 31 October, 27% (601,400) of eligible jobs were furloughed under the CJRS, compared to 8% 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 and small business grants. Separate grant schemes and business rates relief apply in the devolved Administrations.
The Chancellor announced further grants for hospitality leisure and retail businesses on 5 January 2021, worth up to £9,000 depending on the rateable value of the property occupied. The hospitality industry welcomed the grants but called for longer-term support including extended business rates relief and reduced VAT (both set to end in March 2021).
UPDATE: As reported by us in our 4 February 2021 posting entitled “Dedicated Hospitality Minister debate rolls on”:
- In her article for the January/February 2021 edition of Pub & Bar, entitled “Dedicated Hospitality Minister debate provides hope for pub & bar sector”, Suzanne Davies found reasons to be hopeful from the above-mentioned parliamentary debate.
- However, after Suzanne had written her article, the Prime Minister responded in less than entirely positive terms to those who had supported the petitions.
- Nevertheless, in a subsequent Petitions Committee news item dated 9 February 2021 entitled “Government agrees to meeting with hospitality sector petitioners following calls from the Petitions Committee”, it has been confirmed that – in line with a letter from the Prime Minister to the Chair of the House of Commons Liaison Committee – the Business Minister, Paul Scully, will meet with petitioners calling for a Minister for Hospitality; the Chair of the Petitions Committee, Catherine McKinnell, is quoted as saying: “Whilst I welcome the Prime Minister’s decision to agree to our call for the Government to meet with petitioners and hear their concerns about the need for greater support for the hospitality sector, I hope the Prime Minister himself will consider their request that he creates a Minister for Hospitality to oversee Government delivery for this crucial diverse sector”.