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Industry staring at £30 billion black hole as a direct result of lockdown

Restaurant Covid-19 closure sign

Sales across the hospitality sector plummeted 87% in the second quarter of 2020, equivalent to almost £30 billion in lost revenue, according to the latest UKHospitality Tracker collated by CGA.

The collapse in sales followed the country-wide lockdown of the entire sector as hotels, restaurants, pubs, bars and other venues closed their doors from mid-March as per government instructions.

As a result, sales from April and June totalled £4.6 billion, which was down £29.4 billion compared to the same time in 2019.

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Sales last year for this period totalled £34.2 billion.

The ‘cliff-edge’ drop signals the pressing need to extensive and sustained support for the hospitality industry 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.”

The UKH Tracker combines data from all segments of hospitality, and its data confirms the enormous impact of lockdown on the industry.

Hospitality contributed £133.5 billion to the UK economy in 2019, following 3.9% growth, but the rolling annual value of the sector has now dipped below £100 billion, with 12-month sales to the end of June totalling £97.2 billion.

Phil Tate, group CEO of CGA, said: “Our Tracker data is the clearest picture yet of the calamitous impact of the pandemic on hospitality. Hospitality was one of the first sectors to go into full-on lockdown and one of the last to come out, and the result was a virtual wipeout of sales in the second quarter.

“This is a resilient and dynamic industry, and its reopening in July has given the whole country a lift, but Covid-19 has brought unprecedented and existential challenges. Hospitality needs and deserves the support of the government and public as it begins the long road to recovery.”

The UKHospitality Quarterly Tracker is compiled by CGA and based on its Trading Index and OPM data on food and drink sales across the on-trade.

It is combined with hotel data supplied by STR, fast food market data supplied by NPD Group’s Crest Panel and direct company contributions, and is complemented with ONS statistics.

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Andrew Seymour

The author Andrew Seymour

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