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The ONS has just published an analysis of the hospitality sector during coronavirus with a focus on the most recent easing of restrictions in spring 2021. It includes details of how the sector has performed and the future of employment in hospitality.

1. Main points
Hospitality has been hit hard by the coronavirus (COVID-19) pandemic and the impact has been uneven; bars and clubs have fared the worst, but campsites had a relatively better year than the rest of the sector.

Consumer spending on hospitality started to increase in May 2021 but remains at less than 70% of pre-pandemic levels; a similar picture is seen in turnover - in May this remained one-quarter lower than 2019 levels.

Spending by businesses in the hospitality sector has seen smaller increases compared with consumer spending in May 2021; payments to suppliers from food and drink businesses have remained around half of pre-pandemic levels.

Confidence of business survival in the hospitality sector started to increase in May 2021 but remains below the all-sector level.

Job vacancies in the hospitality sector have seen large increases and are higher than pre-pandemic levels; however, in June 2021, the number of employees within the sector remained 11% below February 2020 levels.

2. State of the hospitality sector
Hospitality (accommodation and food activities) has been one of the sectors most affected by lockdowns and government restrictions throughout the coronavirus (COVID-19) pandemic. The sector may have also been affected by Brexit, but as the end of the transition period coincided with the start of the latest lockdown, it is hard to separate the effects of the two.

Data from HM Revenue and Customs (HMRC) show that in April 2020, just under 1,650,000 employees in the sector were on furlough as businesses paused trading, falling to just under 590,000 employees furloughed at the end of May 2021. This represents 25% of all furloughed employees.

As we moved through the pandemic, the hospitality sector adapted to the changing restrictions, with the proportion of businesses temporarily closed falling from 81% in the spring 2020 lockdown to 54% in the early 2021 lockdown.

Business turnover also reflected this change, showing higher revenue in early 2021 than in spring 2020. In May 2020, turnover was just over £1.2bn, compared with £3.4 billion in March 2021. This rose further to £6.9bn by May 2021 after restrictions were partially eased, the highest figure since August 2020. Although this is still around 25% lower than its 2019 level.

This revival was particularly strong for the restaurant and mobile food service activities sub-sector where turnover in May 2021 was £3.3bn, five and a half times what it was in May 2020; this is likely to be because more restaurants were able to provide takeaway services and outdoor dining was permitted.

3. Performance within the hospitality sector
The coronavirus pandemic has highlighted and heightened differences across society and economy, and the hospitality sector is no exception. While the sector itself has been severely affected, some sub-sectors within have fared better than others. Overall, turnover for the hospitality sector has remained below its 2019 levels throughout the pandemic, with May 2021 25% lower than May 2019.

Looking at sub-sectors of hospitality, campsites have performed relatively better. Data from the Monthly Business Survey (MBS) show campsites and related activities was the only sub-sector to have had periods of growth during the pandemic, with turnover higher in summer and parts of winter 2020, compared with 2019 levels.

This is likely because holiday makers followed government advice to avoid foreign holidays by switching to domestic holidays such as camping, and self-catered accommodation. Such holidays have also faced fewer restrictions and are more compatible with social distancing measures.

Pubs and nightclubs have been one of the worst affected sub-sectors; turnover in May 2021 was 39% lower than May 2019 and has consistently remained below 2019 levels since the pandemic began. In the case of pubs, this is likely a consequence of businesses being closed or disrupted for long stretches at a time.

Pubs have been less able to offer a takeaway service when closed and have had partial restrictions, such as earlier closing times and substantial requirements around eating even when open. Nightclubs have remained closed by law since March 2020.

4. Future of hospitality jobs
Most economic indicators point to the start of a recovery for businesses in the hospitality sector, with the labour market showing similar trends. Since early April 2021, furlough rates in the hospitality sector have been declining. The highest recorded level of furloughed staff was approximately 1.6 million in April 2020; this figure fell to its lowest point since furlough began - 0.6 million in May 2021.

The furlough scheme has now started winding down, with the payment provided to employers reducing from 80% of employees' wages, to 70% in July 2021, falling further to 60% in August. This may lead to further reductions in furloughed employees in the sector.

(source: ONS, image: pexels)