Since the Omicron variant emerged, consumer confidence has seen a decline. In turn, this has had a significant impact on the hospitality sector. However, whilst the Government has advised against excessive socialising, no formal restrictions have been reintroduced.

As a result of this lack of confidence, the industry predicts a 40 per cent decrease in takings in December. Despite this, the Government has not offered additional financial support for businesses struggling with a wave of cancellations.

Understandably, this has sparked concern about the survival of many UK hospitality businesses. To prevent closures, some firms in the industry are requesting an extension of the 12.5 per cent VAT discount that is currently in place.

What is the VAT discount?

During the first wave of the pandemic, the Government introduced a temporary VAT reduction of five per cent in July 2020 which continued until March 2021. Following this, a new reduced rate of 12.5 per cent began, which will end in March 2022. This temporary relief was launched to help protect jobs in the hospitality sector and assist it with reopening following the easing of lockdown rules.

Consumer data – a brief review

Consumer confidence in the hospitality sector did begin to increase in May 2021, according to the Office for National Statistics (ONS). However, consumer spending in August was still 25 per cent lower than 2019 figures, as confidence in business survival remained below other sectors. Therefore, with the recent Omicron worries resulting in people rushing to cancel reservations, the hospitality industry may face further repercussions of the ongoing pandemic.

What funding is available?

The Government has a range of schemes to aid business recovery from the effects of COVID-19 that your business may be eligible for. These include the Recovery Loan Scheme, being reimbursed for Statutory Sick Pay (SSP), and Business Rates relief.

Read more about what is available here.

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