Business investment in the hospitality industry rose 40% in Q2 on a quarterly basis, according to the latest ONS data.
Business investment by hotels and restaurants climbed to £994m between April and June, up from £710m in Q1, analysis of the latest ONS data by business tax relief specialists Catax reveals1.
This means the sector has recovered by 45.5% since the second quarter of 2020, when it was being badly hit by lockdowns and covid disruption.
It remains 38.4% down on the £1.6bn recorded for Q4 2019 and 19.3% down on the £1.2bn recorded for the same quarter pre-pandemic (Q2 2019). It is still 52.2% lower than the sector’s all-time high of £2.1bn in Q4 1997.
The sector eclipsed the UK’s overall performance in Q2. Overall business investment nationally rose 4.5% compared with the first quarter of the year, and grew 12.9% on an annual basis.
By comparison, UK GDP increased by 5.5% in Q2 — leaving it 3.3% below where it was pre-pandemic (Q4 2019)3.
The ONS business investment statistics are an indication of net capital expenditure by UK businesses, which includes spending on items such as plant and machinery, transport equipment, software and buildings.
Mark Tighe, CEO of business tax relief consultancy Catax, commented, “The hospitality industry’s fightback is flattered by comparisons with last year’s slowdown in investment in the depths of the pandemic, but nothing should detract from stunning quarterly growth like this.
“The sector has shown it’s on the mend with billions of accidental savings and a hunger for life to return to normal this year promising to be the helping hand the industry needs to forget the trials of the pandemic and rebuild.”
(source: ONS, image: pexels)