Flatlining economy underlines importance of sector for growth

12-Jun-2024 - Last updated on 12-Jun-2024 at 12:20 GMT

Dampened spirits: wet weather in April impacted consumer demand (image: Getty/BrianAJackson)

Flat growth in April due to wet weather impacting consumer demand highlighted the importance of hospitality for economic growth, one trade body has stated.

According to the Office for National Statistics (ONS), monthly real gross domestic product (GDP) was estimated to have shown no growth in April.

Consumer-facing services, which included the food and beverages service sector, output sell by 0.7% in the fourth month of the year, following growth of 0.7% in March.

While the main driver to this was a 2.3% drop in retail trade, this was followed by a 1.2% slump in the food and beverage service activities.

Growth driver

Figures from the recent CGA RSM Hospitality Business Tracker showed hospitality groups saw a 1.7% sales drop year-on-year in April after wet weather hit the nation.

This was the first year-on-year drop in monthly sales since September 2022 and a sharp contrast with March when groups reported 5.2% year-on-year growth when there was an early Easter and drier weather.

On the latest official figures from the ONS, UKHospitality chief executive Kate Nicholls said: “The flatlining economy in April underlines just how important hospitality is as a driver of growth.

“When hospitality suffers, as it did in April due to wet weather dampening consumer demand, the economy suffers too.”

Trade calls

The trade body called for support for the sector from the new Government including on business rates, employment costs and the apprenticeship levy.

“It’s clear hospitality is a bellweather for the nation’s economic performance, which reinforces the need for an incoming Government to act swiftly to create the right conditions for the sector to thrive,” Nicholls added.

“Fixing business rates, reforming the apprenticeship levy and reducing employment costs are all crucial measures that will allow hospitality to grow and create places where people want to live, work and invest.”

Ahead of the general election on Thursday 4 July, UKH launched a toolkit for businesses to share key asks from parliament.

These included business rates and apprenticeship levy reform, as well as reforming VAT and planning rules alongside reducing employer national insurance contributions.