UKH urges for extension of VAT cut to support tourism and hospitality

UKHospitality has urged the government to extend and expand the VAT cut for hospitality businesses in order to stimulate demand and help support the tourism and hospitality sectors.

The news follows the recently published figures by the Office for National Statistics (ONS) which outlined the impact of Covid-19 on the UK’s travel and tourism industry.

ONS revealed that in Q2 2020 overseas residents made 96% fewer visits and spent 97% less than in the same period the previous year.

Domestic and international air passenger traffic fell to less than 2% of its February 2020 levels in April 2020.

Additionally, accommodation and travel agency businesses saw the sharpest decline in turnover during the first national lockdown, falling to 9.3% of their February levels in May 2020.

In the three months to June 2020, employment in accommodation for visitors fell by 21.5% compared with the same three months of 2019.

Kate Nicholls, chief executive, UKHospitality commented that the “sudden and colossal” drop-off in the number of inbound tourists recorded last year makes for “shocking reading” for the hospitality sector.

She reiterated that people’s “reticence to travel last year was understandable”, but the figures still make for “frightening reading”.

Nicholls said: “We appreciate that these figures are not going to return to pre-pandemic levels overnight, but we hope that everything will be done to encourage tourism in the UK, first domestically and then internationally, as soon as it is safe to do so. Key to this will be an extension of the VAT cut for hospitality businesses.

“A healthy tourism sector means that we can play a bigger role in the economic recovery of the country and we can begin to refill these vacancies. As the worldwide vaccine rollout continues apace, we need to send the message that we are open for business.”

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