The hospitality and foodservice sector may not return to 2019 growth levels until 2025, according to a new report.
The Immediate Future of the UK Hospitality/Foodservice market report by Simon Stenning predicts the sector will lose £23bn in the second half of 2020, achieving only 53% of 2019 income levels.
For the whole of 2021 the report forecasts the industry will see a £10bn fall in revenues, down to only £88bn, 10% lower than in 2019.
Longer-term growth forecasts for the industry are that it will recover to 2019 levels by 2025 at the latest, and will eventually increase to £108bn by 2030.
As well as the economic challenges, the report says businesses face a major task to convince their customers that their venues are safe before they can re-ignite demand for eating and drinking out.
Other economic challenges include running sites that are operating at sub-optimal financial levels, and potential stand-offs with property landlords over rent reductions to suit reduced levels of trade. An expected increase in unemployment, meanwhile, will drag down consumer discretionary spending.
All together, these economic effects will mean that many sites won’t re-open, or will fail within a few months. The report forecasts that 22% of all hospitality outlets will not be open by the end of 2020.
An expected reduction in travelling and commuting by public transport and more working from home will benefit certain sectors, including fast food, at the expense of service-led restaurants.
Other predictions include a rapid deployment of new technology with solutions that reduce staff contact, such as order and pay systems and apps, embraced by both operators and consumers.
Stenning said the “enormous challenges” facing operators meant it was imperative the government provides “significant levels of support” to the sector.
“The incredibly hard-working, caring and hospitable nature of the industry will do its utmost to professionally manage the welcoming back of customers and provide safe spaces for us to enjoy our social lives again. However, economic, consumer, profitability, safety and locational factors mean that the industry has to face challenges never encountered before,” Stenning said.