Research Briefing
By Georgina Hutton
11 May 2022

Hospitality industry and Covid19

Summary
1
What is the hospitality industry?
2 Hospitality industry in the UK: pre-pandemic
3 Impact of Covid-19 on the hospitality industry
4 Support for the hospitality industry during the pandemic
Annex: Timeline of hospitality restrictions

commonslibrary.parliament.uk

Number

Hospitality industry and Covid-19

Contributing Authors
Susannah Irvine;
Niamh Foley
Image Credits
Outside bar by rConceptz / image cropped. Licensed under Pixabay License –no copyright required
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Contents
1

What is the hospitality industry?

82

Hospitality industry in the UK: pre-pandemic

10

2.1

Economic output of the hospitality sector

10

2.2

Businesses

11

2.3

Employment

13

Demographics

15

Pay

16

3

Impact of Covid-19 on the hospitality industry

18

3.1

Hospitality restrictions

18

3.2

Economic output

18

3.3

Business trading status and resilience21

How many hospitality businesses closed during the pandemic?

21

Hospitality businesses trading status throughout the pandemic

22

3.4

26

Labour market impact

Workers

26

Coronavirus Job Retention Scheme

27

Job vacancies and labour shortages

28

3.5

Outlook for 2022

30

4

Support for the hospitality industry during the pandemic

33

4.1

Support for the hospitality sector

33

Coronavirus Job Retention Scheme (CJRS)

33Business loans

34

Eat Out to Help Out Scheme

34

Temporary VAT cut

34

Business rates relief

34

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Hospitality industry and Covid-19

Business grants

35

Alcohol duty reform

36

Other support measures

36

4.2

Hospitality, High Streets and Tourism Strategies

37

4.3

Calls for further support for the sector

38

Winter 202038

Calls for VAT and other tax relief

39

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Hospitality industry and Covid-19

Summary
The hospitality industry primarily refers to the food and accommodation
services industries. This means restaurants, cafes, pubs, bars, catering,
hotels, campsites and other accommodation. The hospitality industry has
been one of the hardest hit sectors by the pandemic.

Hospitality industry in the UK: pre-pandemic
In 2019 the economic output of the hospitality sector was £59.3 billion, which
was around 3% of total UK economic output. Hospitality businesses
represented 3-5% of businesses in each country and region.
In the three months to March 2020, there were 2.53 million jobs in thehospitality sector in the UK, representing 7.1% of total UK employment. The
hospitality industry has higher proportions of younger workers, foreign-bornworkers, part-time workers and workers from minority ethnic backgrounds
compared to other sectors. Median hourly pay is lower in hospitality
compared to other sectors.
The excel sheet attached to this briefing allows users to view the number ofaccommodation and food/beverage businesses and employment by
Parliamentary constituency. The Library briefing on Pub Statistics provides
data on the number of pubs by constituency.

Impact of Covid-19
Restrictions on trading disproportionately impacted hospitality businesses.
Restrictions ranged from forced closures and limits on opening hours tofactors that affect customer capacity and demand, such as rules on thenumber of people that can meet indoors and table-service requirements.
While forced closures and restrictions limited customer demand and businessrevenues, hospitality businesses continued to face fixed costs such as certain
property and staff costs.
Some hospitality sub-sectors fared better than others. For example, latenight businesses such as nightclubs and businesses in city centres were thehardest hit. Accommodation sub-sectors such as camping and self-catering
accommodation benefited from domestic tourism and recovered faster thanhotels that rely on international visitors.

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Economic output
The hospitality sector saw the biggest economic declines of all sectors during
the pandemic. Periods of public health restrictions saw large falls in output.
The peak of the economic downturn was in April 2020, where economic output
in the food & accommodation sector was 90% below pre-pandemic levels(February 2020).
Overall, hospitality economic output over 2020 was 42% lower than 2019. In
2021, hospitality output was 21% lower than 2019. The hospitality industry’s
share of the UK economy fell from 3% in 2019 to 2% in 2020 and 2021.

Business trading status and resilience
Hospitality businesses reported higher than average proportions ofbusinesses with low profits, cash reserves and business confidence
throughout the pandemic.
It isn’t possible to say exactly how many hospitality businesses closed during
the pandemic. Between January 2020 and 2021 there was a 10% fall in the
total number of hospitality businesses in the UK. This compares with a 7% fallin businesses across all sectors. Looking only at hospitality employers
however, there was a 3% increase in the number of businesses.

Labour market
From January-March 2020 to October-December 2021, the number of workers
in the sector fell by 90,000 or 3.6%. This compared to a 1.3% decline in jobs
across all industries over this period.
The hospitality sector was one of the largest users of the Coronavirus Job
Retention Scheme (CJRS or furlough scheme), which played a part inprotecting jobs in the sector. In total, across the full length of the scheme,
2.13 million jobs in the hospitality were furloughed, 18% of all furloughed jobs.
As the economy began to re-open in 2021, the hospitality industry began
facing staff shortages. For the three months to February 2022, there were
166,000 job vacancies in the hospitality sector, 7.8% of all employee jobs.
There are a multitude of factors leading to high vacancies including: manybusinesses hiring at once, workers not returning to jobs furloughed andworkers having moved away during the pandemic not returning.

Support for the sector during the pandemic
The hospitality industry benefited from business support schemes available toall industries, such as the CJRS and business loans. Hospitality, leisure andretail businesses were also eligible for business rates relief and a series of

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business grants. Support schemes specifically targeted to the hospitality
industry included the Eat Out to Help Out scheme and a temporary cut to VAT.
Other support included temporary changes to alcohol licensing and planninglaw for pavement licences, to make it easier for restaurants and pubs in
England and Wales to seat and serve customers outdoors. The Government
has said that its forthcoming Levelling up and Regeneration Bill would makethe temporary changes to pavement licences permanent.
Government departments have published strategies relevant to the recoveryof the hospitality sector, including:•

The Department for Digital Culture Media and Sport’s Tourism Recovery
Plan (June 2021)•

The Department for Business Energy and Industrial Strategy’s Hospitality
Strategy (July 2021) and•

The Department for Levelling Up, Housing and Communities’ (DLUHC)
Build Back Better High Streets Strategy (July 2021).

Outlook for 2022
All coronavirus restrictions were lifted from early 2022 and the hospitality
sector continues its recovery, particularly as international tourists return.
Consultancy firm Oxford Economics forecast that the hospitality and leisuresectors are expected to be the fasted growing parts of the economy over the
next five years. This in part reflects the large ground to be recovered following
the pandemic.
Kate Nicholls of trade body UKHospitality has said that hospitality businesses
that had survived the pandemic are in “a very precarious state”. She
highlighted that hospitality businesses have low profit-margins and have highdebt levels following the pandemic.
Some key remaining business support measures expired at the end of March
2022. In particular, the moratorium on eviction for non-payment ofcommercial rent and temporary changes to insolvency law. In addition, VAT
on hospitality services has returned to the full 20% rate. These factors, alongwith ongoing challenges such as rising inflation, means further businessclosures may still yet follow.

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1

What is the hospitality industry?

The hospitality industry primarily refers to food and accommodation service
industries. 1 This means restaurants, cafes, pubs, bars, catering, hotels,
campsites and other accommodation. This is the definition of the industry
used in this paper.
The term hospitality is often used more broadly to include leisure attractions
and events services. The trade body UK Hospitality (which represents the
hospitality and leisure industry) includes convention and trade show
organisers, amusement and recreation activities in their definition of theindustry for their economic analysis of the sector. 2
Other industries such as the wedding industry and events industry also
overlap considerably with hospitality services but are difficult to define in
official statistics (Box 1).
The hospitality industry is a significant contributor to the tourism industry –the industries overlap considerably but are not the same. Tourism refers toproviding services and activities to domestic and international visitors forbusiness, leisure or other purposes.

128Standard Industrial Classification (SIC) Section I: Accommodation and food services.
UK Hospitality, Economic contribution of the UK hospitality industry (2018); accessed 6 January
2021.

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1 Wedding and events industries
There is no official definition of the wedding or events industry. Because of theway that industrial sectors are classified in official statistics, it is very difficult
to estimate the size or contribution of these sectors to the overall UK
economy.
Industrial sectors are classified according to the Standard Industrial
Classification (SIC) codes that group together similar types of economic
activity. These categories are standardised internationally and were last
revised in 2007. There are some SIC codes relevant to the events industry,
such as event catering, the organisation of conventions and trade shows andletting exhibition centres.3
However, the events industry comprises a much broader range of activities
and services including for example, marketing, audio-visual services, andhospitality services such as hotels for accommodation and facilities. There is
no way to disaggregate the contribution of these services that are due toevents in official figures. 4
Similarly, there is no separate SIC code for the wedding industry and no way
to disentangle wedding services from other services of the same type in
official figures. For example, while there is official data for the value of thecatering and photography services, many caterers and photographers would
provide services for weddings as well as other events.
Some industry bodies commission their own research on the sector’s
economic contribution. For example, in 2019 consultancy firm Oxford
Economics published a report (commissioned by the events industry tradealliance) on the economic impacts of exhibitions.

3

4

9

SIC codes: 82.3 (organisation of conventions and trade shows); 56.21 (Event catering); 68.20/2(letting and operating of conference and exhibition centres);
The challenge for capturing the events industry in official statistics has been noted by the industry
prior to the coronavirus crisis, see: BVEP, The UK Events Report 2020, accessed 6 January 2021.

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Hospitality industry and Covid-19

2

Hospitality industry in the UK: prepandemic

2.1

Economic output of the hospitality sector
In 2019 the economic output of the hospitality sector (food & accommodation
services) in the UK was £59.3 billion. 5 This corresponded to around 3.0% of
total UK economic output. Of this, £17.7 billion (30%) was fromaccommodation services and £41.6 billion (70%) was from food and beverage
services. 6
Almost one quarter (24%) of total output from the sector was based in
London; 13% was based in the South East. The relative importance of food &accommodation services to the economic output for each country and region
however is similar: food & accommodation services make up 3–4% of the total
economic output for each UK country and region. 7

Hospitality industry: economic summary 2019
Hospitality% UK Total

Economic output (GVA)£59.3 billion

3.0%

Employment

2.53 million

7.1%

Businesses

223,000

3.7%

Notes: GVA is a measure of economic output similar to GDP; Business count is for 1 January 2020 androunded to the nearest thousand; Employment is for the three months to March 2020. Employment is
not the same as the number of people employed, as individuals may hold more than one job.
Sources: ONS, GDP output approach - low level aggregates, 31 March 2022; ONS, Workforce Jobs, via
NOMIS Workforce jobs by industry; BEIS, Business Population Estimates: 2020, 8 October 2020.

5

6

7

10

Gross Value Added (GVA). GVA is a measure of economic activity similar to GDP. GVA is thecontribution of part of the economy, minus costs incurred in production.
Source: ONS, GDP output approach - low level aggregates, 12 September 2020, data series KKJ3,
KK7V and KK7X.
Source: ONS, Regional gross value added (balanced) by industry: all NUTS level regions, 19
December 2019.

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Business turnover is seasonal
Business turnover is a key input when measuring the economic output andperformance of a sector. For the hospitality industry business turnover isseasonal.
The following chart shows non-seasonally adjusted turnover for hospitality
sub-sectors. Both food & accommodation sub-sectors see revenue rise in thesummer, particularly for the accommodation sector due to the summer
holiday tourism season. Food & beverage services see a peak in turnover in
December, with Christmas party bookings playing a part. This pattern isrelevant to understanding the impact of the pandemic on the industry, withrestrictions on trading at peak-turnover periods being particularly damaging.

Hospitality business turnover is seasonal
Monthly turnover for hospitality sub-sectors, Great Britain, 2018-2019£ billions, current price, non-seasonally adjusted
8,000
Food & beverage services

7,000
6,000
5,000
4,000

Accommodation

3,000
2,000
1,000
0
Feb Apr
2018

Jun

Aug

Oct

Dec

Feb Apr
2019

Jun

Aug

Oct

Dec

Feb

Source: ONS, Monthly Business Survey of service industries, 11 March 2022

2.2

Businesses
There were 223,045 food and accommodation businesses in the UK as of 1
January 2020, 3.7% of all businesses in the UK. 8 Of these, 137,225 were
employers, 10% of the UK total; 172,390 were food and drink service
businesses (77%); and 50,660 were accommodation businesses (23%). 9
18% of UK food and accommodation businesses are based in London (40,816
businesses). Wales has the highest proportion of hospitality businesses, with
8
9

11

BEIS, Business Population Estimates 2020, 1 October 2020, Table 5 and 6.
BEIS, Business Population Estimates 2020, 1 October 2020, Table 5 and 6. Numbers do not add tototal due to rounding.

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Hospitality industry and Covid-19

the sector representing 5.5% of all businesses in Wales. Northern Ireland has
the lowest, representing 2.8% of businesses in Northern Ireland. 10

Hospitality businesses represent 3–5% of the businesspopulation in UK countries and regions% of buisness population in each country and region, January 2020
Wales

5.5

North East

5.4

Scotland

5.2

South West

4.6

Yorks & Humber

4.2

London

3.6

North West

3.6

East Midlands

3.4

West Midlands

3.2

South East

3.0

East England

3.0

Northern Ireland
UK

2.8
3.7

Note: data based on the head office location of the businesses, individual business units/workplaces
are not counted separately.
Source: BEIS, Business Population Estimates: 2020, 8 October 2020.

Most hospitality businesses are small or medium enterprises (SMEs) (as is thecase across most sectors of the economy). 97% of hospitality employers(133,315) businesses were micro or small businesses (1–49 employees). There
were 3,235 medium-sized businesses (50–249 employees) and 675 large
businesses (250+ employees). 11
The Department for Business Energy and Industry Strategy (BEIS) Small
Business Survey 2019 reported that hospitality had higher proportions of SMEs
led by minority ethnic groups and women compared to other sectors.12 7% of
hospitality SME employers were minority ethnic-led businesses (compared to

10

11
12

12

BEIS, Business Population Estimates 2020, 1 October 2020. The data is based on the head officelocation of the businesses, individual business units/workplaces are not counted separately.
BEIS, Business Population Estimates 2020, 1 October 2020, Table 5.
Business where at least half of the leadership team are women or come from minority ethnic
groups, respectively. BEIS, Small Business Survey 2019: businesses with employees, 4 June 2020,
Table 25 and 26.

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Hospitality industry and Covid-19

5% across all industries).13 21% of hospitality SME employers were led by
women (compared to 15% across all sectors).

2 Hospitality businesses and employment: local data
The excel sheet attached to this briefing provides the number ofaccommodation and food/beverage businesses and employment by
Parliamentary constituency.
The data only includes businesses registered for Value Added Tax (VAT,£85,000 turnover threshold) and/or with employees registered for Pay-AsYou-Earn (PAYE) so are not comparable to the figures shown in the main
briefing.
The Library briefing on Pub Statistics provides statistics on pub numbers by
Parliamentary constituency.

2.3

Employment
In the three months to March 2020, there were 2.53 million jobs in theaccommodation and food service sector in the UK, representing 7.1% of total
UK jobs. 14 Note that this does not represent the number of people working inthe sector, as individuals may hold more than one job.
From March 2013 to March 2020, the number of jobs in the sector had been
rising, as shown in the chart below. In the first quarter of 2013 the number ofjobs in the industry was around 2 million. Reaching 2.5 million in the firstquarter of 2020 represents a 25% increase on 2013. In comparison, the total
number of jobs across the economy as a whole increased by 11% in that time.
Representing 7.1% of all jobs in the economy, the sector was the 7th largest
employer of the main 20 industrial sectors. 15 Taking a broader definition of thehospitality and leisure industry (see section 1.1), hospitality trade body, UK
Hospitality, says the sector is the “third largest employer in the UK”. 16

13

14

15

16

13

Data on breakdown by different minority ethnic groups is not available. Minority ethnic groups
included those classified as being from mixed race backgrounds, Indian, Pakistani, Bangladeshi,
other Asian background, black Caribbean, black African, other Black background, Chinese, Arab or
Gypsy or Irish traveller. See: Small Business Survey 2019: methodology.
ONS, Workforce Jobs, JOBS02: Workforce jobs by industry (dataset), 15 December 2020, seasonallyadjusted
Based on the Standard Industrial Classification (SIC) system, excluding Section U: Activities ofExtraterritorial Organisations and Bodies.
UK Hospitality, The economic contribution of the UK hospitality industry, October 2018, p9

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Jobs in the food and accommodation sector
March 2012 to March 2020
3,000
2,500
2,000
1,500
1,000
500
0
2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: ONS, Labour Market overview December 2020, Dataset A01 (table 6), 15 December 2020

Country and region
The table below shows jobs in the hospitality sector by country and region of
the UK in March 2020. London had the highest number of jobs in the sector.
The South West had the highest proportion of hospitality jobs (8.7%) relative
to total employment in the region. Northern Ireland had the smallest
proportion of jobs in the sector (5.9%).

Hospitality employment by country and region
January-March 2020
Jobs (thousands)

Percent total jobs in region

London

454.2

7.5%

South East

334.9

6.8%

South West

265.2

8.8%

North West

249.9

6.5%

East

220.4

6.7%

West Midlands

190.1

6.4%

Yorkshire and The Humber

170.4

6.2%

East Midlands

142.7

5.9%

North East

97.3

8.1%

Scotland

215.3

7.7%

Wales

119.5

8.2%

Northern Ireland

54.5

5.9%

United Kingdom2514.47.1%

Note: Data is seasonally adjusted.
Source: ONS, Workforce Jobs (Dataset A01: Summary of Labour Market Statistics, Table 6, 15 March

14

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Demographics
The hospitality industry has higher proportions of younger workers, foreignborn workers, part-time workers and workers from minority ethnic
backgrounds compared to other sectors.17
According to the ONS, 46% of hospitality jobs in March 2020 were full-timeand 54% were part-time.18 This compares to 68% full-time and 32% part-timeacross all industries.
In 2019, 35% of workers in the sector were aged 16 to 24 compared to 11%
across all sectors. 19
The Migration Observatory reported that 30% of the workers in the food &accommodation sector in 2019 were foreign-born workers compared to 18%
across all economic sectors. 20
Ethnicity
The table below shows the breakdown of workers in the food service andaccommodation sector by ethnicity. In the 12 months to June 2020, 17% ofworkers in the sector were from minority ethnic backgrounds (Black, Asianand Mixed/Multiple ethnic backgrounds), compared to 13% of all workers in
the UK. 7% of all workers from minority ethnic backgrounds worked in thehospitality sector, compared to 5% for all workers.21
Please note, statistics for all workers may differ from earlier in this section,
due to different data sources.

17
18
19

20
21

15

Resolution Foundation, Ethnic minorities in the hospitality sector, December 2020, pages 3-6.
ONS, Workforce Jobs via NOMIS database, accessed 6 May 2022.
ONS ad hoc release: Employment by age, industry and occupation, UK, 2010, 2015 and 2019,
November 2020 (data from Annual Population Survey)
Migration Observatory, Migrants in the UK Labour Market , January 2021.
Source: ONS, Annual Population Survey, via NOMIS annual population survey - regional - ethnicity
by industry [accessed 6 January 2021]

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Workers in the accommodation and food service sector by ethnicity
July 2019-June 2020
Accommodation and food

Whole economy
Workers

WorkersWhite(thousands)% of all workers(thousands)% of all workers

1,476

83%

28,44788%

Other ethnic group

57

3%

511

2%

Any other Asian Backgroud

46

3%

383

1%

Black/African/Caribbean/Black British

44

3%

999

3%

Indian

39

2%

936

3%

Banglasdeshi

38

2%

203

1%

Mixed/multiple ethnic group

33

2%

406

1%

Pakistani

25

1%

486

2%

Chinese

19

1%

156

1%

All minority ethnic groups

302

17%

4,080

13%

1,778

100%

32,527

100%

All workers

Note: all minority ethnic backgrounds includes mixed/multiple ethnic backgrounds.
Source: ONS, Annual Population Survey, via NOMIS annual population survey - regional - ethnicity by industry [accessed: 6 January 2021]

Pay
The chart below shows median hourly pay by industry. Of the 20 broad
industrial sectors, workers in the accommodation and food service sector had
the lowest median hourly pay. In April 2020, workers in the sector had a
median hourly pay of £8.48, compared to £10.39 on average for all workers in
the UK. Median hourly pay was lower than other sectors for both full-time andpart-time hospitality workers.
The Resolution Foundation reported that in 2019, 52% of workers in thehospitality sector are ‘low paid’ (the proportion of people earning below twothirds of median hourly pay), compared to 15% of all workers. 22
The Resolution Foundation also reported that the hospitality sector has higher
than average proportions of workers on ‘non-standard’ forms of employment.
In 2019, 3% were on zero-hour contracts compared to 2% of the whole
economy, 9% were on temporary contracts compared 5% of all workers. 23

22
23

16

Resolution Foundation, Low Pay Britain 2020, 23 September 2020, p17
Resolution Foundation, Ethnic minorities in the hospitality sector (PDF), December 2020, p4-5.

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Hospitality industry and Covid-19

Median hourly pay by industry
Excluding overtime, 2020, UK
IT and communication
Financial and insurance
Professional,
scientificand technical
Informationand communication
FinancialElectricity
and insurance& gas
Mining andquarrying
Public administration
anddefence
Professional,
scientificand technicalHumanhealth andsocial work
activities
Public administration and defence
Construction
Water supply
Real estateEducation
activities
Education
Manufacturing
Real estate
activities
Manufacturing
Human health and social work activities
Transportation and storage
Transportation and storage
Administrative and support service
Other service activities
Other service
activities
Construction
Agriculture,
forestryfishingArts,
entertainment
andandrecreation
WholesaleandretailWholesale and retail trade
trade
Arts, entertainment and recreation
Agriculture, forestry and fishing
Administrative and support service
Accommodation
Accommodation andand food
food service
serviceAll workers

£8.72

£8.48
£13.65£0£5£5 £10£15 £10£10.39
£20

£15
£25

Source: ONS, ASHE, Earnings and hours worked, industry by two-digit SIC: ASHE Table 4 (revised), October 2021, accessed May 2022.

17

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3

Impact of Covid-19 on the hospitality
industry

3.1

Hospitality restrictions
The food & accommodation sector has been one of the hardest hit sectors by
the pandemic. Restrictions on trading have disproportionately impacted
hospitality businesses.
Restrictions ranged from forced closures and limits on opening hours tofactors that affect customer capacity and demand, such as rules on thenumber of people that can meet indoors, on mixing between households,
alcohol sales and table-service requirements. While forced closures andrestrictions limited customer demand and business revenues, hospitality
businesses continued to face fixed costs such as property and staff costs.
The Annex to this briefing paper provides a timeline of hospitality restrictions
during the pandemic. Broadly, full lockdowns requiring hospitality businesses
to close to seated dining were in place from March to July 2020, in November
2020 and from December 2020-April 2021. 24 Various restrictions on tradingwere in place throughout 2020, including different restrictions in different
local authority areas and in each nation.
The following sections set out data sources showing the impact of thepandemic on the food & accommodation industry UK wide.

3.2

Economic output
The hospitality sector saw the biggest economic declines of all sectors during
the pandemic. Overall, hospitality economic output during 2020 was 42%
lower than during 2019; in 2021 output was 21% lower than 2019. 25 The
hospitality industry’s share of the UK economy fell from 3% in 2019 to 2% in2020 and 2021. 26

24
25
26

18

Dates varied between each nation of the UK, see the Annex for further information and sources.
ONS, GDP output approach, low level aggregates, Low level aggregates series KL9H.
ONS, GDP output approach, low level aggregates, series KKP5 KKJ3, accessed 5 May 2022.

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Hospitality industry and Covid-19

Periods of public health restrictions saw large falls in ourput, as shown in thechart below. 27
The peak of the economic downturn was in April 2020, where economic output
in the food & accommodation sector was 90% below pre-pandemic levels(February 2020). In July 2020, when dining was allowed to resume (withrestrictions on customer numbers), output in the sector was still down 44%
compared to February.
Economic activity in the sector recovered further in August 2020, boosted by
the Government’s Eat Out to Help Out Scheme alongside easing lockdown
restrictions and the summer holiday period. 28 The industry saw 71% growth inAugust 2020 compared to July, driven by increased output in the food andbeverage service sector.29 However, output was still down 14% in August 2020
compared to February 2020.

The hospitality industry saw large economic declines during the pandemic
Monthly GVA output, selected sectors, seasonally adjusted% change on Feb 2020
20
0
-20
-40

Hos pitality
Reta il & wholesale-60

Arts , cul ture & s port
Ma nufacturing-80

Fi nancial servi ces
Cons truction-100
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
2020
2022
2021

Note: Data subject to volatility and a large degree of uncertainty due to Covid-19.
Source: ONS, Monthly gross domestic product by gross value added, 11 March 2022. Series: ECYT, ECYJ, ECYH, ECYD, ECY9, ECY6After a peak in August 2020 output in the sector declined as restrictions were
gradually re-imposed before the full nationwide lockdown at the end of
December 2020. The impact of restrictions on hospitality output in winter2020 was not as severe as the first lockdown, as many businesses had

27

28
29

19

Gross Value Added (GVA). GVA is a measure of economic activity similar to GDP. In brief, GVA is thecontribution of part of the economy, minus any costs incurred in production.
ONS, Monthly gross domestic product by gross value added, 11 September 2020.
ONS, Coronavirus and the impact on output in the UK economy: August 2020, 9 October 2020.

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Hospitality industry and Covid-19

adjusted to lockdown trading, for example by expanding their online
takeaway services.
Output strongly recovered from April 2021 which saw the start of restrictions
lifting. The summer of 2021 saw hospitality output rise above pre-pandemic
levels between August and November. This corresponds to high customer
numbers during the summer of 2021. 30
Output declined in December 2021 due to the emergence of the Omicron
variant which saw work from home guidance and customer caution return.
However, the impact on output was significantly less severe compared toearlier peaks in the virus. Hospitality output was 6% below pre-pandemic
levels in December 2021 and 3% below in January 2022.
By February 2022, monthly output for the hospitality sector had risen above
pre-pandemic levels again (4.9% above February 2020). Early estimates of
economic performance in March 2022 showed the service sector growth being
fuelled by the hospitality and leisure industries with customer demand
returning. 31 Section 2.5 below covers outlook for the sector going forward.

Some sectors were more impacted than others
There has been variation in impact between hospitality sub-sectors’ recovery
through the pandemic. Although initially all sub-sectors saw a big fall inturnover, as the pandemic progressed recovery differed.
For example, by Quarter 3 2021, turnover for camping grounds and othershort-stay accommodation had recovered to over 70% above its prepandemic level (Q4 2019), while hotels remained 2% below pre-pandemic
levels. 32 This may be attributed to domestic tourism recovering whereas
hotels, particularly in city centres, suffered much more from the large fall ininternational visitors. Low international visitor numbers continued throughout
the pandemic and remained low in Q3 2021 when most domestic coronavirus
restrictions had been lifted, but some travel restrictions (such as testing andquarantine rules) remained.33

30

31

32
33

20

Open Table, State of the Industry data on seated diners at UK restaurants on the Open Table
network. See also: ONS, Coronavirus and the latest indicators for the UK economy and society: 6
May 2021
S&P Global / Markit UK Services PMI, March 2022; see Library briefing: Economic indicators, 29 April
2022.
ONS, Effects of the coronavirus (COVID-19) pandemic on "high-contact" industries, 6 May 2022.
See the Library briefing: Coronavirus: International Travel FAQs for England, 24 March 2022.

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

Camping and other short-stay accommodation saw
stronger recovery than hotels% change in UK business turnover, Q2 2020 and Q3 2021 compared to Q4 2019
Q2 2020

Q3 2021

Short-stay accommodation
Camping and trailer parks
Other accommodation
Restaurants and mobile foodPubs and bars
HotelsEvent catering
-100

-75

-50

-25

0

25

50

75

100

Source: ONS, Effects of the coronavirus (COVID-19) pandemic on "high-contact" industries, 6 May 2022

3.3

Business trading status and resilience
How many hospitality businesses closed during the
pandemic?
It is difficult to say how many hospitality businesses permanently closed
during the pandemic, or how many new businesses opened. There is no single
measure of business closures and openings that covers all types ofbusinesses.34
Between January 2020 and 2021 there was a 10% fall in the total number ofhospitality businesses in the UK. 35 This compares with a 7% fall in businesses
across all sectors. The decline in businesses was predominately led bybusinesses with no employees. Looking only at hospitality employers, there
was a 3% increase in the number of businesses. This means more new
hospitality business employers opened in 2020 than closed.
Some hospitality sub-sectors fared better than others. For example, thenumber of takeaway food business units increased between 2020 and 2021

34

35

21

For further discussion on measuring business closures during the pandemic, see our briefing paper:
Business Statistics (Section 1.2).
A net decrease of 22,000 businesses; BEIS, Business population estimates 2021.

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Hospitality industry and Covid-19

while the number of bars and clubs decreased. 36 For pubs and clubs, thiscontinued a trend of declining business numbers seen over the last few
years.37 UKHospitality stated that late-night businesses such as nightclubs,
and businesses in city centres were the hardest hit during the pandemic. 38
The number of hospitality businesses going insolvent in 2020 was lower thanpre-pandemic levels. 39 This is likely to be due to Government support for thesector, not only financial support schemes for businesses (explained in
Section 3 below) but also temporary changes to insolvency law to prevent
otherwise viable companies going into insolvency. 40
The number of hospitality businesses (and businesses in general) going
insolvent has been broadly rising since January 2021. In the three months toJanuary 2022, 513 hospitality businesses went insolvent in England and Wales,
almost the same amount as the same period before the pandemic.41
Some key remaining measures supporting businesses expired at the end of
March 2022. In particular, the moratorium on eviction for non-payment ofcommercial rent and changes to insolvency law, which means further
business closures may still be yet to follow. 42 Outlook for the hospitality sector
for 2022 is discussed further in Section 4.

Hospitality businesses trading status throughout the
pandemic
The Office for National Statistics (ONS) Business Insights and Conditions(BICS) provides fortnightly indicators on how business trading conditions are
impacted by the pandemic and other factors such as Brexit, supply chain
disruptions and labour shortages.

36

37
38
39

40
41

42

22

Commons Library analysis of ONS figures for 5-digit hospitality sub-sectors, ONS Interdepartmental
Business Register, UK Business Counts via NOMIS database. Takeaway food businesses increased by
6% in 2020-2021; pubs declined by 1%. These figures only capture businesses registered for PAYE
and/or VAT. Figures are for business units, which means each unit of a chain business is counted
separately. These figures are not comparable to the total business figures from the BEIS Business
Population Estimates quoted in the paragraph above.
See our briefing: Pub statistics, 21 May 2021.
DCMS Committee, Oral evidence: Promoting Britain Abroad, HC 856, 8 March 2022, Q167.
Insolvency is just one of a number of ways that a business can come to an end. Insolvencies typicallymake up only a small fraction of total business closures. There are also types of insolvency that do
not lead to business closure, although most do. See Companies House official statistics: definitions
to accompany our statistical releases for definitions of dissolution and insolvency. Insolvency
Service Official Statistics provide monthly and quarterly statistics for company insolvencies by typeof insolvency.
Our briefing: Business statistics (section 1) discusses this trend across all businesses.
515 businesses went insolvent for the three months to January 2020; Insolvency Service, Monthly
Insolvency Statistics, January 2022.
See our briefings: Commercial Rent (Coronavirus) Act 2022 and New business support measures:
Corporate Insolvency and Governance Act 2020.

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Hospitality industry and Covid-19

The following chart shows the trading status of hospitality businesses fromlate June 2020 to end of December 2021, as reported to the ONS.
The proportion of businesses trading gradually increased through July 2020as businesses were able to reopen following the first lockdown. Around 80%
of hospitality business were trading over the summer of 2020 before declining
in October and November as restrictions were reimposed.
From late-December 2020, the proportion of businesses trading was lower
than those paused trading. Between 22 February and 7 March 2021, 43% of UK
hospitality businesses were trading, while 55% had paused trading and 2%
had permanently ceased trading.
The proportion of business trading quickly increased from early April 2021 as
restrictions were gradually lifted. By the end of 2021, between 13-26 December
2021, 95% businesses were trading and 4% had paused trading.

Hospitality businesses trading status
UK, 15 Jun 2020–26 Dec 2021
100%
Currently trading

80%
60%
40%
20%

Paused trading

Dec-21

Nov-21

Oct-21

Sep-21

Aug-21

Jul-21

Jun-21

May-21

Apr-21

Mar-21

Feb-21

Jan-21

Dec-20Nov-20

Oct-20

Sep-20Aug-20Jul-200%Notes: data points are for fortnightly survey periods. Businesses permanently ceased trading are notshown.
Source: ONS, Business impact of coronavirus survey (BICS) Waves 7–20.

The proportion of hospitality businesses paused trading during the pandemic
has been high relative to most other sectors. Between 22 February and 2
March 2021 only the “other services” sector (which includes hairdressers andbeauty salons) had a larger proportion of businesses paused trading. In
comparison across all industries, 74% businesses were trading and 24% had
paused trading during this period

23

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

Business trading status
22 February–7 March 2021
All Industries
Other service
Accommodation & foodArts, entertainment & rec
Wholesale & retail
Construction
Manufacturing
Transport0%
Currently trading

20%

Paused trading

40%

60%

80%

100%

Permanently ceased trading

Note: Permanently ceased trading not shown where % is less than 1. Totals do not sum to 100 due torounding.
Source: Source: ONS, Business impact of coronavirus survey (BICS) Wave 20.

Hospitality businesses also reported higher than average proportions ofbusinesses with low profits, cash reserves and business confidence
throughout the pandemic.
During mid-February 2021, 45% of hospitality businesses said that theirprofits were over 50% lower than normally expected at this time of year,
compared to 13% of businesses across all sectors. 43 In late February 2021, 17%of hospitality businesses reported less than one month or no cash reserves,compared to 8% across all industries. Over one quarter of hospitality
businesses (28%) had “low or no confidence” that their business would
survive the next 3 months. 44

43

44

24

Percentage of businesses currently trading; 8-21 February. ONS, Business impact of coronavirus
survey (BICS) (Wave 20).
Percentage of businesses that had not permanently stopped trading; 22 February and 7 March 2021.
ONS, Business impact of coronavirus survey (BICS) (Wave 20).

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Hospitality industry and Covid-19

Businesses cash ﬂow and conﬁdence
22 February–7 March 2021
Cash reserves

Hospitality

None or lessthan 1 month17%

All industriesHigh
conﬁdence
47%

Less than
6 months
19%

More than
6 months

Will business survive the next 3 months?

Moderate
conﬁdence
28%

12%

Not sure

10% 20% 30% 40% 50%

0%

43%

Low or no
conﬁdence17%

Not sure18%

0%

10% 20% 30% 40% 50%

Notes: Proportion of businesses that have not permanently ceased trading.
Source: ONS, Business impact of coronavirus survey (BICS) Wave 20

By late February 2022, similar proportions of hospitality businesses werereporting low cash reserves, but these figures were now more in line with theaverage across the economy. 13% of hospitality businesses reported less than
one month or no cash reserves, compared to 15% across all businesses.
Business confidence had also improved, with 8% of businesses reporting low
or no confidence that their businesses would survive the next three months.45

Businesses cash ﬂow and conﬁdence
21 February–6 March 2022
Cash reserves
None or le ss
tha n 1 month

Hospita lity

46%

32%

0%

10%

20% 30% 40% 50%

37%Mode ra teconﬁde nce
L ow or no
conﬁde nce

9%

Not sure

Will business survive the next 3 months?
Hig hconﬁde nce

13%

L e ss tha n
6 months
More tha n
6 months

All industrie s

40%

8%

14%

Not sure
0%

10% 20% 30% 40% 50%

Notes: Proportion of businesses that have not permanently ceased trading.
Source: ONS, Business impact of coronavirus survey (BICS) Wave 51.

45

Percentage of businesses that had not permanently stopped trading; 21 February and 6 March 2022.
ONS, Business impact of coronavirus survey (BICS) (Wave 51).

25

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Hospitality industry and Covid-19

3.4

Labour market impact
Workers
Official Labour market data indicates that there has been a fall in the numberof workers in the accommodation and food service sector. From JanuaryMarch 2020 to October-December 2021, the number of workers in the sector
fell by 3.6% (90,000). 46 This compares to a 1.3% decline in jobs across allindustries. 47
The chart below shows that jobs in the sector recovered during 2021 following
a more significant fall in jobs during 2020. In October-December 2020 thenumber of jobs in the sector was 13.6% below pre-pandemic levels.

Jobs in the food and accommodation sector
Jan-Mar 2018 to Oct-Dec 2021
2,600
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
Mar 18

Sep 18Mar 19 Sep 19

Mar 20

Sep 20Mar 21

Sep 21

Source: ONS, Workforce Jobs. A01 Table 6.

The Guardian reported major hospitality and leisure brands that announced
redundancies during 2020 on their Coronavirus redundancy tracker. These
included redundancies announced at Pret A Manger, Whitbread (owners ofPremier Inn), Marston’s brewery and SSP group (owner of brands including
Starbucks, M&S food, Burger King, LEON and others).

46
47

26

ONS, Labour Market overview December 2020, Dataset A01 (table 6), 15 December 2020
See Library briefing: Coronavirus: Impact on the labour market (20 April 2022).

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Hospitality industry and Covid-19

Coronavirus Job Retention Scheme
The hospitality sector was one of the largest users of the Coronavirus Job
Retention Scheme (CJRS or furlough scheme), which played a part inprotecting jobs in the sector. 48
The scheme launched in March 2020 and was designed to support employers
to retain and continue to pay staff while businesses were closed.49 The
Government paid up to £2,500 per month to furloughed employees.
The chart below shows the number of jobs on furlough in the sector each dayfrom March 2020. Changes in the number of jobs on furlough generally alignwith changes in lockdown restrictions and changes to support payments
under the scheme.
The number of hospitality jobs on furlough under the scheme peaked on 10
April 2020, with 1.6 million jobs on furlough. From this point until the end of
October 2020, the number of furloughed jobs declined.
The number of jobs on furlough increased again from 31 October 2020 as
further nationwide lockdown restrictions were announced.
At the end of January 2021, there were 1.15 million jobs on furlough in theaccommodation and food service sector. These numbers stayed at a relatively
steady level (between 1.1 million and 1.2 million) until the end of April 2021.
Restrictions on hospitality eased at this point, and the number of furloughed
employees gradually reduced.
At the end of May 2021, 36% of jobs in the sector were on furlough, compared
to 9% of jobs across all sectors. The furlough scheme ended on 30 September
2021, with 159,400 hospitality jobs on furlough. This represented 9% of
hospitality jobs on furlough compared to 4% of jobs across the economy.
In total, across the full length of the scheme, 2.13 million jobs in thehospitality were furloughed, 18% of all jobs furloughed. Only the wholesale
and retail sector had a higher number of jobs furloughed (2.25 million).
More information on furloughed workers by sector can be found in the Librarybriefing, Coronavirus Job Retention Scheme: statistics.

48
49

27

See our Insight: Examining the end of the furlough scheme, 15 November 2021.
HM Treasury, The Chancellor Rishi Sunak provides an updated statement on coronavirus. 20 March
2020.

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

Jobs furloughed per day in food service and accommodation
23 March 2020 to 30 September 2021, millions
2.0

1.5

1.0

Restaurants and pubs begin toreopen (April 2021)

Return to local
restrictions (2 Dec)

Pubs and
restaurants
reopened

0.5

0.0
Mar '20

Furloughscheme ends
(30 Sept)

National
lockdown(4 Jan 2021)
England-wide
lockdown (4 Nov)
May '20

Jul '20

Sep '20

Nov '20Jan '21

Mar '21

May '21

Jul '21

Sep '21

Source: HMRC, HMRC Coronavirus (Covid-19) statistics, 16 December 2021

Job vacancies and labour shortages
As the economy began to re-open in 2021, the hospitality industry began
facing staff shortages. Vacancies in the industry were at already high levels
relative to other industries even before the pandemic and have been atrecord-highs since mid-2021, shown in the chart below.
For the three months to February 2022, there were 166,000 job vacancies in
the hospitality sector, 7.8% of all employee jobs.
Labour shortages are reportedly worse in London and regional tourism hubs,
which have suffered from larger falls in customer demand during the
pandemic, compared to other places. 50

50

28

DCMS Committee, Oral evidence: Promoting Britain Abroad, HC 856, 8 March 2022, Q144.

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

Hosptiality job vacancies are at record-highs

Vacancies per 100 employee jobs, seasonally adjusted
9
8
7
6
5
4

Hospitality

3
2
1

All vacancies

0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Source: ONS, VACS02: Vacancies by industry [accessed 30 March 2022]

There are a multitude of different factors leading to high vacancies, including
for example: 51•

many businesses hiring workers at once as the economy reopens.

•

workers not returning to jobs furloughed having found otheropportunities. Kate Nicholls of UKHospitality said that the industry was
still “battling” the perception of hospitality as a stable employer.52•

workers having moved abroad during the pandemic and not returning.

Regarding overseas workers, UK Hospitality said in 2021 that travel
restrictions and quarantine requirements were the biggest factor impacting
workers coming to the UK. 53 The hospitality sector has a high proportion offoreign-born, in particular EU-born workers, compared to other industries. 54
The Office for National Statistics, Business Impact and Conditions Survey(BICS) reported survey evidence suggesting that a higher proportion of
hospitality businesses saw the number of EU workers decrease since the startof the pandemic compared to other industries. For the survey period 29
December 2020 to 10 January 2021 (Wave 22), the ONS reported that 17% of
51
52
53
54

29

Treasury Committee, Oral evidence: Economic impact of coronavirus, HC 306, 7 June 2021, Q 486.
DCMS Committee, Oral evidence: Promoting Britain Abroad, HC 856, 8 March 2022, Q159.
Treasury Committee, Oral evidence: Economic impact of coronavirus, HC 306, 7 June 2021, Q486.
Migration Observatory reported in their January 2021 Migrants in the UK Labour Market report that
30% of the workers in this sector in 2019 were foreign born workers, and this compared to 18%
across all economic sectors. Resolution Foundation, Home and away: The UK labour market in a
post-Brexit world, 16 December 2020, page 21 and 26.

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Hospitality industry and Covid-19

hospitality businesses said that the number of workers from within the EU
employed had decreased since the start of the covid-19 pandemic, compared
to 8% across all industries.
Additionally, as noted in section 1.4, the hospitality industry has an aboveaverage proportion of younger workers and part-time workers which may
also be contributing to staff shortages due to labour market changes during
the pandemic. The London School of Economics (LSE) reported that the
pandemic saw a much bigger fall in part-time jobs compared to full-timejobs, particularly for the hospitality sector. LSE reported that part-time jobs
went from making up 34% of the sector in 2019, to 31.3% in 2021. Additionally,
the hospitality industry has commented that many young workers andstudents moved away from cities during the pandemic and are therefore in
the “wrong place at the wrong time” to fill vacancies. 55 Additionally, training
courses disrupted during the pandemic has limited the flow of new trainees. 56
As a result of labour shortages, hospitality businesses are under pressure toincrease wages and improve working conditions.57 As noted in section 2.3, thehospitality sector has lower median hourly pay compared to other sectors.
Industry organisations and trade unions have highlighted concerns over long
working hours for chefs. 58
Kate Nicholls of UKHospitality said pressure to increase wages is challenging
for businesses which are struggling with high debt from the pandemic. 59 She
said that the pandemic represented a “reset moment” for the industry to lookat working conditions, training and skills development. 60 The industry haslaunched an industry-wide recruitment campaign – ‘Hospitality Rising’ – as
the official industry response to the recruitment crisis. It is a fundraising effort
within the industry to launch a hospitality recruitment advertising campaign
to “change the perception of hospitality for the better”.61

3.5

Outlook for 2022
All coronavirus restrictions were lifted from early 2022 and the hospitality
sector continues its recovery, particularly as international tourists return.
Consultancy firm Oxford Economics forecast that the hospitality and leisuresectors are expected to be the fasted growing parts of the economy over the

55

56
57
58

59

60
61

30

Treasury Committee, Oral evidence: Economic impact of coronavirus, HC 306, 7 June 2021, Q486;
DCMS Committee, Oral evidence: Promoting Britain Abroad, HC 856, 8 March 2022, Q159.
Is there a solution to the hospitality staff crisis?, BBC News, 21 July 2021.
Is there a solution to the hospitality staff crisis?, BBC News, 21 July 2021.
Unite, Chefs demand better [accessed 10 May 2022]; Health and Safety Executive, The Burnt Chef
Project joins HSE’s Working Minds campaign, 25 April 2022.
Proportion of EU workers in UK hospitality falls to lowest level since 2019, Alice Hancock, Financial
Times, 6 April 2022 [subs only].
Is there a solution to the hospitality staff crisis?, BBC News, 21 July 2021.
UKHospitality, Hospitality industry launches £5m campaign for talent in response to jobs and skills
crisis, 10 February 2022.

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Hospitality industry and Covid-19

next five years. 62 In part this reflects that the industry saw greater falls during
the pandemic and has more scope to recover. Oxford economics predictedthat hospitality’s share of the economy in 2026 to be similar to that in 2019. 63
Key issues for the hospitality sector going forward are labour market
shortages, concerns about the impact of inflation on consumer confidence
and high debt-levels in the sector.
Kate Nicholls of UKHospitality told the House of Commons Digital Culture
Media and Sport Select Committee that hospitality businesses that had
survived the pandemic are in “a very precarious state” and would remainfragile for another two years. 64 She said that UKHospitality estimated thesector had “around £10 billion of covid-related debt” outstanding and notedthat businesses in the sector have low profit margins in general (even before
the pandemic).65 She said the sector would “undoubtedly see business failures
over the next two years” and called for support to not taper off too soon. 66
On top of this, businesses in the hospitality industry are, like all businesses,
facing rising input costs, both for goods and energy.67 The ONS reported thatin late February to early April 2022, energy prices and inflation of goods andservices prices were most highly cited as the main concerns facing businesses
in general.68 The industry is concerned about rising prices for customers justat the time that demand is returning and the sector needs to continue toentice customers back to eating out and traveling. 69
The ONS reported that in March, 37% of hospitality businesses reported
having to absorb price increases and 37% reported having to pass on costs tocustomers. 14% of hospitality businesses reported having to reduce staff work
hours (compared to 4% across all businesses) and 9% reported making
redundancies (compared to 2% across all businesses).70
Much of the last remaining coronavirus business support ended at the end of
March 2022, which the industry described as a “cliff edge”. 71 VAT returned to
the full 20% rate and the moratorium on eviction for non-payment ofcommercial rent also ended. Business rates remain reduced, but relief is now

62
63
64
65
66
67

68

69

70
71

31

Oxford Economics, UK: High inflation slows the regional recovery, 29 April 2022.
Oxford Economics, UK: High inflation slows the regional recovery, 29 April 2022.
DCMS Committee, Oral evidence: Promoting Britain Abroad, HC 856, 8 March 2022, Q166.
DCMS Committee, Oral evidence: Promoting Britain Abroad, HC 856, 8 March 2022, Q166.
DCMS Committee, Oral evidence: Promoting Britain Abroad, HC 856, 8 March 2022, Q166.
See Library papers: Rising cost of living in the UK and Background to Spring Statement (17 March
2022).
35% of hospitality businesses reported energy prices to their main concern and 24% of businesses
reported inflation as the main concern; ONS, Business Insights and Conditions Survey, Wave 53 21
March-3 April.
UK Hospitality, Skyrocketing energy costs force hospitality businesses to raise prices and cut
opening hours, 22 March 2022.
ONS, Business Insights and Conditions Survey, wave 52, 7-20 March 2022
UK businesses face April ‘cliff edge’ as most pandemic support ends, Alice Hancock, Financial
Times, 31 March 2022 [subs only].

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Hospitality industry and Covid-19

50% (compared to 66% up to end of March 2022) and subject to a £110,000
per-business cap.72
The Hospitality Strategy, High Streets Strategy and Tourism Recovery Plan are
the Government’s policy plans for supporting the industry with thesechallenges (see section 3.2 below).

72

32

HM Treasury, Autumn Budget and Spending Review 2021, October 2021, para 5.44

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Hospitality industry and Covid-19

4Support for the hospitality industry
during the pandemic

4.1

Support for the hospitality sector

Further information
about Government
support schemes is
Library briefing
Coronavirus:
Support forbusinesses.

The hospitality industry benefited from business support schemes available toall industries, such as the Coronavirus Job Retention Scheme and businessloans. 73 Hospitality, leisure and retail businesses were eligible for businessrates relief and a series of business grants. Support schemes specificallytargeted to the hospitality industry included the Eat Out to Help Out scheme
and a temporary cut to VAT (summarised below).
There was no separate or tailored support for sectors such as the events or
the wedding industry (see Box 1). 74
Data is not available on support provided to hospitality businesses byconstituency or local area. The Library paper Coronavirus business support
scheme: statistics includes constituency data on total support provided inloans, grants, business rates relief, Eat Out to Help Out and employment
support.

Coronavirus Job Retention Scheme (CJRS)Up to 30 September 2021, claims worth £12.9 billion had been made bybusinesses in the food service and accommodation sector under the CJRS,
just under 18.5% of the total value of all claims. This was the highest of all
sectors covered by the scheme. 75
Section 2.5 above covers the number of jobs furloughed. The Library paper
Coronavirus Job Retention Scheme: statistics provides further information.

73

74

75

33

The Library briefing paper, Coronavirus: support for businesses provides further information about
the schemes. The Library paper: Coronavirus business support: statistics provides figures on the
support provided including by Parliamentary constituency.
HC Deb 9 November 2020 [Live Events and Weddings: Covid-19 Support]. The Government also
points to the Culture Recovery Fund that supports some venues and cultural organisations unable toopen (PQ 110294, 2 November 2020]
HMRC, Coronavirus Job Retention Scheme statistics, 16 December 2021.

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Hospitality industry and Covid-19

Business loans
There are two main loan schemes that represent the majority of loans: theCoronavirus Business Interruption Loan Scheme (CBLIS) and the Bounce Back
Loan Schemes (BBLS).
As of 31 May 2021, 125,873 loans (CBILS and BBLS) worth £6.2 billion in total
had been offered to hospitality businesses, representing 8% of the total loan
value across all sectors. 76 This corresponds to 56% of hospitality businesses
being offered a loan. In comparison, approximately 28% of UK businesses
overall had been offered a loan. 77
The Library paper Coronavirus business support scheme: statistics provides
further information.

Eat Out to Help Out Scheme
The Eat Out to Help Out scheme (EOHO) provided 50% off the cost of food andnon-alcoholic drinks eaten-in at participating restaurants on Monday to
Wednesdays in August 2020.
Overall, £849 million was claimed under the Scheme across 78,118 outlets. The
Library briefing paper on the Scheme provides further information, statistics
and commentary on the scheme’s impact. The Library paper Coronavirus
business support scheme: statistics provides data on EOHO claims byconstituency.

Temporary VAT cut
VAT for hospitality, accommodation and visitor attractions was temporarily
reduced to 5% (from 20%) from 15 July 2020 to 30 September 2021. A 12.5%
rate then applied for the six months to 31 March 2022, after which it reverted
back to 20%. 78 The reduced rate applied to food and non-alcoholic drinks
served in hospitality venues in addition to accommodation services andadmission to certain visitor attractions. The Library briefing paper, VAT on
Tourism (SN06812) provides further information.

Business rates relief
Retail, hospitality and leisure businesses in England received a 100%
business rates holiday in 2020/21. This was extended to 30 June 2021 in the
March 2021 Budget. A 66% relief followed from 1 July 2021 to 31 March 2022,
76

77

78

34

British Business Bank, Regional analysis of Coronavirus loan schemes shows continued even
distribution across the UK, 15 October 2020. Figures are for loans offered up to 4 October and may
differ from aggregate figures published by HM Treasury due to a time lag between the sources andsince some borrowers may decide not to proceed with an approved loan.
House of Commons Library calculations based on British Business Bank data on loans (15 October2020) and the BEIS, Business population estimates: 2020. Businesses were only able to take out one
loan.
HM Treasury, Budget 2021, 3 March 2021.

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Hospitality industry and Covid-19

which was capped. 79 The level of the cap depended on whether the eligible
property was closed on 5 January 2021. From 1 April 2022 to 31 March 2023,
businesses in these sectors will receive 50% business rates relief up to a£110,000 per-business cap. 80
The business rates multiplier (essentially the business rates tax rate) was
frozen in both 2021/22 and 2022/23. The multiplier would normally be
increased by inflation.
Each nation has set up their own coronavirus business rates relief schemes.81
English local authorities estimated that around 374,200 business premises
were eligible for the expanded 2020/21 retail relief as at 5 July 2020. 82 Thesebusinesses received around £10.8 billion in relief.83

Business grants
The Library briefing,
Coronavirus:
Support forbusinesses provides
more information on
business rates relief
and business grants(Section 10).

Businesses in the retail, leisure and hospitality sectors in England that are
eligible for full business rate relief, and which occupy properties with a
rateable value of £51,000 or under, were entitled to a grant of £25,000 in
respect of each qualifying property that they occupy in 2020/21. This grantscheme ran from March-August 2020. A series of further grant schemes
followed later in the year as tiered local restrictions were brought in in
October. 84
A £1000 Christmas grant for pubs in Tiers 2 and 3 in England that
predominantly serve alcohol was announced 1 December 2020.
On 5 January 2021, the Chancellor announced further grants of £4,000-9,000
per qualifying property (depending on rateable value) occupied byhospitality, leisure and retail businesses in England, to support businesses“through to the Spring”.
In the March Budget 2021 the Chancellor announced a new restart grants
scheme in England through which hospitality, accommodation, leisure,personal care and gym businesses could receive up to £18,000 per premises
to help businesses re-open safely once restrictions are lifted.85

79
80
81

82

83
84

85

35

HM Treasury, Budget 2021, 3 March 2021.
HM Treasury, Autumn Budget and Spending Review 2021, October 2021, para 5.44
Scottish Government. Help for non-domestic rate payers in Scotland during coronavirus (Covid-19),
31 July 2020; Welsh Government, Business Wales: Business rates relief, accessed 6 January 2021;
NIbusinessinfo.co.uk. Coronavirus: Rates support for businesses, 21 May 2020.
Legally known as hereditaments. A hereditament is a unit of non-domestic property that is, or may
become, liable to national non-domestic rates. These can include pylons, telephone boxes,
advertising hoardings as well as offices, shops, warehouses, factories, and public buildings likehospitals and schools.
MHCLG, Covid-19: business rates reliefs by parliamentary constituency, 7 August 2020
Coronavirus: New business grant schemes explained, 17 November 2020 provides further
information.
HM Treasury, Budget 2021, 3 March 2021.

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

In December 2021, further grants in England were made available forbusinesses affected by the emergence of the Omicron variant. 86 Hospitality
businesses were likely to see decreased footfall, and numerous cancellations,due to the rise in cases, at what is traditionally a very profitable time of year.
Businesses were eligible for grants of up to £6,000 per premises, andassistance with statutory sick pay for small and medium-sized employers.
Separate grants schemes applied in the devolved administrations. 87

Alcohol duty reform
The pubs and beer industries have been long campaigning for reform toalcohol duties, which intensified during the pandemic. 88
The Chancellor froze duty rates for beer, cider, wine, and spirits in 2020/21
and 2021/22. 89 In the 2021 Autumn Budget and Spending Review the
Chancellor announced a review of alcohol duties, saying they would undergoa “major simplification” such that drinks would be taxed in proportion to theiralcohol content. In addition, a new relief was flagged that would see rates ofdraft beer and cider cut by 5%. 90 A consultation was opened in October 2021
and closed in January 2022. The Government is analysing responses to theconsultation. 91
The Library briefing, Alcohol taxation and the pub trade, provides
background information on alcohol duties and previous changes.

Other support measures
The Business and Planning Act 2020 made some temporary changes toalcohol licensing and planning law to make it easier for restaurants andpubs in England and Wales to seat and serve customers outdoors and comply
with social distancing requirements. 92 These included temporary pavement
licences that made it easier for businesses to offer seated dining outside, andchanges to licencing laws that made it easier to serve take-away alcoholic
drinks. These temporary changes have been extended to 30 September
2022. 93 There were also changes to allow marquees to be installed in

86

87

88

89
90
91
92

93

36

HM Treasury and Department for Business, Energy & Industrial Strategy, £1 billion in support forbusinesses most impacted by Omicron across the UK, 21 December 2021
Scottish Government. Help for non-domestic rate payers in Scotland during coronavirus (Covid-19),
31 July 2020; Welsh Government, Business Wales: Financial support and grants;
BBPA, BBPA Budget response – Good news for pubs in the short-term, long-term stimulus stillneeded to secure the great British pub, 3 March 2021.
HM Treasury, Budget 2020, 22 March 2020 and Budget 2021, 3 March 2021.
HM Treasury, Autumn Budget and Spending Review, 27 October 2021, page 8 para 2.178-2.182.
HM Treasury, The new alcohol duty system: consultation, 27 October 2021.
For further information, see the Commons Library analysis of the Business and Planning Bill 2019-21,
26 June 2020.
DLUHC, Guidance: pavement licences (outdoor seating), 21 March 2022.

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

hospitality venues and for local councils to hold markets without planningpermission, which have now been made permanent. 94
In terms of support for property costs, the Government introduced a
moratorium on forfeiture due to non-payment of commercial rent (extended
to 25 March 2022), as well as changes to commercial rent arrears recovery,
statutory demands and winding up petitions. 95 These measures wereextended several times and as the pandemic went on there was uncertainty
about how disputes about outstanding rent debt would be resolved. 96 The
Commercial Rent (Coronavirus) Bill 2021-22 was introduced in November 2021
and received Royal Assent in March 2022. The Act establishes an arbitration
process to resolve disputes over rent arrears between business tenants andlandlords. Further information can be found in the Library briefing on the Bill.
Trade body UKHospitality welcomed the Act as “decisive Government
legislation”. 97
The Government established a Hospitality Futures Group to provide a forum
for discussion between Government and industry leaders on possible ways tosupport the recovery of the hospitality sector. The Government stated in
November 2020 that the Group met weekly from June 2020 and engages witha “small number of Government officials”.98 The group was led from the
Department for Business Energy and Industrial Strategy (BEIS).

4.2

Hospitality, High Streets and Tourism
Strategies
In June and July 2021, Government departments published several strategies
relevant to the recovery of the hospitality sector, including:•

The Department for Digital Culture Media and Sport’s Tourism Recovery
Plan (June 2021)•

The Department for Business Energy and Industrial Strategy’s Hospitality
Strategy (July 2021) and•

The Department for Levelling Up, Housing and Communities’ (DLUHC)
Build Back Better High Streets Strategy (July 2021).

94

DLUHC, Boost for high streets and businesses as markets and outdoor marquees allowed
permanently, 20 December 2021
Section 11 of the Library briefing Coronavirus: Support for businesses provides further informationand sources.
Economy faces 'long Covid' if debts not tackled, BBC News, 7 June 2021;
UK Hospitality, UKH comments on Commercial Rent Bill, 24 March 2022.
PQ 91973, 18 November 2020 [Hospitality Industry and Retail Sector Council]

95

96
97
98

37

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

In September 2021, the Hospitality Sector Council was established, comprising
hospitality industry leaders and Government. The group’s role is to support
the implementation of the Hospitality Strategy.
The short-term focus of these strategies, particularly the Hospitality Strategy
and Tourism Plan, was an aim to re-open the economy and remove
restrictions impacting business trading as soon as possible. Hospitality
businesses are a key tourism sector, and many businesses rely on tourists forcustomer demand. The Tourism Recovery Plan aims to help domestic tourism
recover to pre-pandemic levels by 2022 and international tourism by 2023. 99
Both the High Streets and Hospitality strategies suggest making the more
flexible pavement licensing system that was introduced during the pandemic,
permanent. The Government said that its forthcoming Levelling up andRegeneration Bill, mentioned in the Queen’s Speech 2022, would bring thesechanges this Parliamentary session. 100 UKHospitality said that the flexible
pavement licences were a “really positive success story”. 101
Other policy proposals to support hospitality in both the High Streets andHospitality strategies included encouraging more flexible use of high street
buildings and setting up hospitality regeneration hubs, aiming to create newopportunities for micro businesses and start-ups.
Efforts on skills and workforce since the Hospitality Strategy launched has
included creating a steering group (National Employers and Partners
Team) to find hospitality vacancies and support employers in filling them, andthe Department for Education adding hospitality and catering qualifications
to Free Courses for Jobs.102

4.3

Calls for further support for the sector
Winter 2020
In December 2020 the hospitality industry described the Government’s
support for the sector as “woefully inadequate” to cover “even basic fixed
costs”, stating it would not be sufficient to stop mass business closures andjob losses in 2021. 103 The sector, joined by the Labour Party, pointed to the lossof peak Christmas revenues important for many businesses, particularly as
parts of England were moved into the highest category of local restrictions

99
100

101
102
103

38

Department for Digital Culture Media and Sport, Tourism Recovery Plan, June 2021, paragraph 7.
PM’s Office, Prime Minister to give local leaders power to breathe new life into high streets, 7 May
2022.
UK Hospitality, UKHospitality says permanent pavement licences will speed recovery, 3 March 2022.
BEIS, New Hospitality Council to guide the sector's recovery, 29 September 2021.
Industry warns 80 per cent of UK pubs face ‘perilous position’, Alice Hancock, Financial Times, 27
November 2020; Restaurants and pubs call for help as 72% fear closing permanently, Rebecca
Smithers, The Guardian, 18 November 2020; BBPA, Last orders for an enhanced package ofGovernment support, 22 December 2020; Campaign for Pubs,17 December 2020.

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19(Tier 4) before Christmas.104 The sector called for more grants and extensions
to the CJRS, business rates and VAT relief. 105
Further support measures were subsequently announced by the Government
in January 2021 and the March Budget 2021 which were welcomed by tradebodies UKHospitality and the British Beer and Pub Association. 106 These
included further grants and extensions to many of the existing support
schemes that the industry had been calling for. The industry called on the
Government to stick to its earliest forecast reopening date of 21 June 2021. 107

Calls for VAT and other tax relief
The industry has been calling for longer-term support for the sector throughreform of business rates, VAT and beer duty. For example, UK Hospitality has
called for the 12.5% VAT rate to be permanent, saying that the VAT relief has
been the biggest support to the sector after the furlough scheme and isessential for the sector’s long-term recovery and growth. 108
Pub trade associations called for a reduced rate to apply to all drinks during
the pandemic, arguing that “wet-led” pubs that make most of their revenue
from alcohol sales, got little benefit from the VAT relief measure.109
In April 2022 when asked what support was being provided to hospitality
businesses in the face of rising prices and the end of VAT relief, the Treasury
pointed towards ongoing support through business rates relief and subsidies
for apprenticeships and training:
The government has already prioritised support for SMEs by cutting businessrates by 50% for eligible retail, hospitality and leisure businesses, providing a
95% subsidy for apprenticeships, and supporting them to invest and grow byincreasing the Annual Investment Allowance to £1 million. The Help to Grow
scheme provides eligible SMEs with a 90% subsidy for world classmanagement training and subsidises the cost of new software up to £5,000.
The Spring Statement 2022 went further and cuts the cost of employment forhalf a million small businesses, by increasing the Employment Allowance from£4,000 to £5,000. This means that from April, 670,000 businesses will not pay
NICs and the Health and Social Care Levy. In addition, to help businesses and

104

105

106

107

108

109

39

BBPA, December pub beer sales up to 90% lower than normal - 270 million fewer pints, 14
December 2020; Labour Party, Not such a Merry Christmas as majority of Britain’s pubs and bars
miss out on billions in sales – Lucy Powell, 26 December 2020; Christmas takings in pubs, bars andrestaurants fall almost 80%, Rob Davies, The Guardian, 28 December 2020.
UKHospitality, UKHospitality comments on tiers announcement: “act now or face hospitality
bloodbath”, 30 December 2020; Campaign for Pubs, #SupportPubsNow campaign.
UK Hospitality, UKHospitality reaction the Chancellor’s Budget statement, 3 March 2021; British beerand pub association, BBPA Budget response, 3 March 2021.
UK Hospitality, UKHospitality reaction the Chancellor’s Budget statement, 3 March 2021; British beerand pub association, BBPA Budget response, 3 March 2021.
UK hospitality sector intensifies calls for permanent VAT reduction, Alice Hancock, Financial Times,
12 January 2022 [subs only]; DCMS Committee, Oral evidence: Promoting Britain Abroad, HC 856, 8
March 2022, Q166; UK Hospitality, Comment on the latest ONS labour market figures, 15 March 2022.
British beer and pub association, BBPA Budget response, 3 March 2021

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

consumers, the main rates of petrol and diesel duty will be cut by 5 pence per
litre, the largest cash terms cut that has ever been applied to fuel duty rates atonce. 110

110

40

PQ HL7508, 7 April 2022 [Hospitality Industry: VAT].

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

Annex: Timeline of hospitality
restrictions
For further details and sources, please see the Commons Library briefing
paper Coronavirus: A history of English lockdown laws.
Timelines for Covid-19 rules in Scotland and Wales are provided by the
Scottish Parliament Information Centre and the Welsh Parliament ResearchService.

2020•

16 March: People were advised to avoid bars, restaurants and otherindoor leisure venues•

20 March: Hospitality businesses were required to close (except for takeaway/delivery service).

•

Early July: Hospitality businesses were able to open for dining withsocial distancing measures and Covid-secure mitigations in place (exact
dates varied between nations).

•

July-August: Other than social distancing and Covid-secure mitigations
there were limited restrictions on the opening conditions for hospitality
venues over the summer. The Eat Out to Help Out Scheme in August
encouraged customers to eat out UK-wide. Local lockdown restrictions
were in place in some areas. 111•

September: Restrictions on restaurant and bar opening began being
introduced from September. In England, from 14 September the “rule of6” applied to all indoor gatherings. From 24 September hospitality
venues were required to close at 10 pm and were limited to table service
only. Similar restrictions on opening hours and groups of 6 were also inplace in Scotland and Wales in late September. A growing number of
local area restrictions were imposed.

•

October: From 14 October in England, what had become a complex
patchwork of local restrictions was simplified into three tiers. Pubs andrestaurants serving food could open to dining (with restrictions ongroups) even under the strictest tier (Tier 3) but were only allowed to

111

41

Leicester was the first city to be placed into “local lockdown” on 29 June.

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19

serve alcohol with a “substantial meal”. Local restrictions were also inplace in the devolved administrations.
•November: Restaurants, cafes, pubs and bars were required to close
other than for take-away during the England wide lockdown from 4
November to 2 December. Shorter “circuit breaker” lockdowns applied inWales and Northern Ireland (over different periods). In Scotland a systemof local restrictions applied, with pubs and restaurants required to closein the highest local protection level (Level 5).

•

December the tiered system of local lockdown restrictions returned inEngland. Restaurants and pubs in Tier 3 were required to close (withtakeaway only); all restaurants and pubs had to close at 11 pm. A fourthtier was introduced on 18 December. The number of areas in Tiers 3 and 4
increased throughout the festive period. Pubs and restaurants wererequired to close (except for takeaway) from Boxing Day in Wales,
Scotland and Northern Ireland.

2021•

January 2021: From 5 January all hospitality venues in England wererequired to close (except for takeaway) with the commencement of thethird England-wide lockdown.

•

April: Outdoor hospitality reopened, with restrictions on group sizes, andtable service only. In Scotland, hospitality venues were able to serve foodindoors until 8pm, without alcohol.

•

May: Indoor dining reopened with restrictions on group sizes. In England,
six people (or two households) could gather in indoor hospitality venues.
In Scotland, up to six people from three households could meet, withalcohol able to be served until 10.30pm. In Wales, six people fromdifferent households could meet indoors.

•

July: The majority of restrictions on hospitality in Scotland and England
were removed on 19 July. In Scotland, customers were still required toprovide contact details for Test and Assist.

•

August: Wales removed all restrictions on hospitality on 7 August,including nightclubs reopening.

•

October: Covid passes were required for nightclubs in Wales.

•

December: Work from home guidance was introduced in England in
response to the Omicron variant (“Plan B”). The NHS Covid pass was
required for entry into certain venues such as nightclubs.112 In Wales, the

112

42

PM’s Office, Prime Minister confirms move to Plan B in England, 8 December 2021.

Commons Library Research Briefing, 11 May 2022

Hospitality industry and Covid-19“rule of six” was reintroduced, hospitality venues were required to takecustomer contact details, and licensed premises were only able tooperate with table service, from 26 December. In Scotland, one metre
physical distancing in hospitality premises was introduced, andnightclubs closed, from 27 December.

2022•

January 2022: Social distancing restrictions on hospitality in Scotland
and Wales were lifted.

•

February 2022: UK Government publishes its Living with Covid-19 Planfor the removing all remaining Covid-19 restrictions in England. 113•

April 2022: all remaining Covid measures were lifted in England.

113

43

Cabinet Office, COVID-19 Response: Living with COVID-19, 21 February 2022.

Commons Library Research Briefing, 11 May 2022

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