The new figures have demonstrated how the industry’s fight to recover from the pandemic has been decimated by Omicron, with average sales almost reaching pre-pandemic levels (98%) in the weeks before the new variant emerged.
UKH CEO Kate Nicholls said: “Hospitality businesses have been hit hard during a key trading period – and this is after missing out on the crucial Christmas and New Year sales last year.
Cancellations and decreased footfall in December
“Restrictions must be kept to a minimum and must be lifted as quickly as possible to help an already beleaguered sector or many will simply not survive – and those who do make it through face a return to 20% VAT in April.”
City centre and London venues were hit particularly hard when work from home restrictions were put in place again last month with a drop in consumer confidence causing mass cancelations and a decrease in footfall over December, which often equates to up to three months’ trade for many establishments.
UKH has called for the Government to keep VAT at 12.5% for the sector and not return to 20% VAT in April after many pubs, bars and nightclubs lost out on crucial festive trade for the second year in a row.
Enhanced rates relief needed
This comes after the latest figures from the Office for National Statistics (ONS) showed growth for the whole country in Q3 was driven by hospitality, a sector which creates £130bn in economic activity and generates £39bn of tax for the Exchequer as well as representing 10% of UK employment, 6% of businesses and 5% of GDP
Nicholls added: “In order to help the industry to recover and return to growth, the Government must commit to keeping VAT at 12.5% and offering enhanced rates relief. Further support will also be needed should additional restrictions be imposed or the tougher measures in Scotland and Wales be retained into 2022.”