A substantial uptick in business investments in hotels and restaurants last year shows the potential for a promising rebound for hospitality, should Government grant it sufficient support, new figures suggest.

According to analysis from tax relief specialist Catax, business investment in the industry recovered by 45.3% in Q3 2020, rising by £308m on the previous quarter.

Though losses across the sector were great – experiencing a 54% sales drop for the year, equivalent to a loss of £71.8bn – total investment was down just 7.5% year on year to £988m between July and September.

This was significantly better than the performance of UK industry investment as a whole, which dropped by 19.2% in Q3.

Whilst hospitality starts at a lower base than most areas of the economy when it comes to investment, the quarterly bounce-back is notable, Catax chief executive Mark Tighe has argued.

“This significant percentage jump in business investment in the third quarter represents a promising rebound for an industry that has been hit like a freight train by the pandemic and repeated lockdowns,” he said.

“It will continue to suffer so long as the leisure industry remains shut down but the quick effects of the vaccine drive will hopefully allow the UK to throw off its Covid shackles soon and deliver a speedy return to normal levels of activity as we move through the year.”

This is a view shared by UK Hospitality CEO Kate Nicholls, who has continually urged Government to consider the significant role the sector could play in the country’s economic recovery should it be afforded the support to do so.

Responding to ONS figures on Friday (12 February) which revealed output in the accommodation and food services sector was 51.8% down year-on-year in 2020, Nicholls said the figures “drive home the point about the importance of hospitality as an economic force.”

“When hospitality struggles, the entire UK economy struggles,” she said. “If our businesses are given the support they need to survive the remaining months of the crisis and put in a position to thrive again, they can drive the recovery of the nation.”