The UK hotel industry is far from returning to pre-pandemic commerce despite tax breaks and increased spending per guest over the summer, according to the latest industry data.

Sales in restaurants, bars and hotels reached £ 31.6 billion in the three months to the end of September, up 73% from summer 2020 but still down 10% from summer 2020. at the same period in 2019, according to figures to come. released by the CGA tracker industry.

After months of foreclosure at the start of the year, customers spent more than before when they stepped out in the summer, but severe staff shortages and soaring costs in the industry kept many businesses from to meet increased demand.

UKHospitality, the industry’s trade body, has warned the sector remains “at risk”.

Kate Nicholls, chief executive of UKHospitality, said industry-wide profit margins have been cut by about a third on average since reopens after the lockdown, and the trade body expected the cost of labor increases by 11 to 13% next year. with operators struggling to recruit and retain staff.

“The anticipation was that the recovery would have been stronger than it was,” said Nicholls. “This underlines the fragility of the sector. Businesses are not operating at full capacity and at full power. ”

Utilities costs are expected to increase by 50-80% when renewing next contracts over the next six months, while food and beverage prices are expected to increase by 7-9%, she added.

The hospitality sector is the UK’s third-largest private sector employer, accounting for 10% of jobs and 5% of the national gross domestic product, although more than 8% of sites have closed permanently since March last year .

The sector has been disproportionately affected by the departure of thousands of European workers following Brexit, as well as many workers leaving the industry to find work in more stable sectors like logistics during the pandemic.

Nick Mackenzie, managing director of the Greene King Pub Group, said he was concerned staff would work much longer to fill labor shortages and be more likely to seek other jobs as a result.

He said it was “inevitable” that prices would rise across the industry early next year because government support such as a 20% reduction in value added tax. at 12.5%, has been deleted.

New calorie labeling regulations and a deposit system for single-use beverage containers in Scotland would all add “costs and complexity” as the industry faces heavy pressure on margins, added Mackenzie.

Operators hope the current drop in Covid-19 rates will continue until the end of the Christmas season, known in the industry as “the golden quarter,” when much of the industry is making the cut. majority of its profits.

But bookings are becoming more and more last-minute, and several business owners have said customers are reluctant to put down payments on bookings until they’re more certain travel can take place.

A serial investor in the industry has warned that there could be another wave of business failures after the next quarterly rent payment date in late December “when people say I can’t imagine trading profitably in the first quarter “.