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EY Regional Economic Forecast predicts hospitality industry will struggle

20th Jan 2021 - 05:00
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Abstract
According to EY’s latest Regional Economic Forecast the hospitality sector is expected to take longer than most other sectors to recover jobs lost in 2020 due to the Covid-19 pandemic.

Employment in the hospitality sector is forecast to fall by the equivalent of an annual average of -1.39% by 2023 compared to 2019. When measured by Gross Value Added (GVA) the hospitality sector is predicted to be smaller in 2023 than it was in 2019.

Christian Mole, EY’s UK&I head of hospitality & leisure, commented: “There is no doubt that hospitality is one of the sectors most adversely affected by the Covid-19 pandemic.

“As social distancing restrictions ease and consumer confidence returns during the post-pandemic period, we expect consumer demand for travel and eating out to recover.

“Where some businesses were facing the challenge of rising labour costs pre-pandemic due to a talent shortage, this pressure will likely be eased given higher staff availability.

“While the sector is forecast to have a smaller footprint in the future, the businesses that are resilient enough to survive may ultimately emerge to become healthier and better positioned for long-term growth.”

The forecast shows the sector will see regional inequalities, with the largest declines in the South West (-1.83% per year between 2019-23) and the West Midlands (-1.7%). The regions likely to see the lowest declines in employment are London (-0.97%) and the South East (-1.07%).

Written by
Edward Waddell