U.K. hospitality industry lost $35 billion in revenue amid pandemic

UK hospitality industry lost $35 billion in revenue amid pandemic

Sales for hotels, restaurants, and pubs in the U.K. took a sharp downturn in the second quarter, leaving the industry with a massive loss.

It appears that Europe’s three-month-long lockdown has dragged the hospitality industry down and left U.K. restaurants, pubs, and hotels losing billions in revenue. On Tuesday, July 28, a report published by BBC revealed that more than $35 billion were lost during the three months of the second quarter.

Hospitality industry Q2 sales fell by 87%

As per the New Quarterly Tracker provided by UKHospitality’s and research firm CGA, businesses under the hospitality industry have earned more than $5 billion in sales only during the three months. And compared to last year’s total earnings ($40.3 billion), the sector said an estimated $35 billion were wiped out due to the pandemic.

Overall, sales for the second quarter dived by 87%.

Kate Nicholls, the chief executive of UKHospitality, said that the data emphasizes “how precarious the present situation is” for the sector.

“While it is 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,” Nicholls said.

UK hospitality industry lost $35 billion in revenue amid pandemic

The U.K. partially lifted its lockdown restrictions on July 4 only, which started last March 32.

Despite the government’s green light, many restaurants doubt an immediate and steady recovery. Popular restaurants like Le Caprice in London, for instance, are closing. Some businesses, such as pubs, are still prohibited from operating too.

In the United States, restaurants and pubs are struggling to bounce back too.

The National Restaurant Association said that an estimated $240 billion in revenue were lost this year. Some states like California have reversed its lockdown restrictions as well, as the number of coronavirus cases in the country continues to grow after partially opening its economy.

Revenue loss calls for government assistance

Given the “precarious situation” the sector is in, the chief executive of UKHospitality mentioned that government aid is crucial to help businesses weather the recession.

In a statement quoted by Bloomberg, Nicholls explained:

“We are only on the very first steps in a long recovery. These figures substantiate our message that businesses still need support from the government if we want to prevent more business failures and job losses.”

Earlier this month, the U.K. government provided new measures aiming to alleviate the sector’s woes. Chancellor Sunak, for instance, has introduced a voucher scheme called “Eat Out to Help Out,” which offers a 50% discount to all dined-in meals in cafes, restaurants, and even pubs.

The Chancellor also said that—for some parts of the hospitality industry—the government would cut VAT from 20% down to 5%.

But then again, due to uncertainties brought by the pandemic, Nicholls emphasized that businesses under the said sector still needs assistance. The hospitality industry contributed a total of 133.5 billion euros to the U.K. economy last year, but it has now fallen below 100 billion euros.

Images courtesy of Quang Nguyen Vinh, Kaique Rocha/Pexels

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