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Highlights
- The hospitality sector recorded early signs of recovery in sales after the emergence of the Omicron variant that affected the sector’s demand over the festive season.
- Ease in Plan B restrictions and working from office could further encourage the sales, experts feel.
The UK’s hospitality sector recorded early signs of recovery in sales after the emergence of the Omicron variant impacted the sector’s demand in the festive season last year.
Hospitality bosses said with the Boris Johnson government’s plan to ease the Plan B restrictions, which were imposed due to rising cases of the omicron variant in December, more and more people will be returning to work, which could further encourage sales.
However, bosses warned that the hospitality sector is still on the recovery path and have asked Chancellor Rishi Sunak to extend his support to the sector and reduce the temporary 12.5% rate of value-added tax (VAT) and duty on draught beer, scheduled for 2023.
According to a CGA research report, the hospitality sector missed out £3 billion in revenue in December 2021 and lost over 8,000 licensed premises last year. According to data by AlixPartners in 2021, 8,228 hospitality venues were lost, which is a 7% slump. However, in the last quarter of 2021, the number of total licensed premises increased by 1.6% (by 1,672) to 1,06,880.
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Let us look at five FTSE-listed hospitality stocks for investment:
Intercontinental Hotels Group Plc (LON: IHG)
Intercontinental Hotels Group Plc owns and operates restaurants, hotels, and resorts in over 100 countries under various brands names. The company is listed on the FTSE 100 Index and has a strong brand name.
Intercontinental Hotels Group Plc has given a return of 2.84% to its shareholders in the last one year and its year-to-date return stands at 3.81% as of 21 January 2022. Its shares were trading at GBX 4,963, up by 0.49%, around 10:53 AM (GMT), with a market capitalization of £9,088.57 million on 21 January 2022.
Mitchells & Butlers Plc (LON: MAB)
The FTSE 250-listed company is the largest operator of pubs, restaurants and bars in UK and Germany, with over 1,700 pubs and restaurants. Recently, the company reported under its trading update, covering 15 weeks to 8 January, that like-for-like (LFL) sales growth of 2.7% for the first weeks of the period. But due to emergence of omicron variant, the sales slumped by 6% in the next seven weeks, which included the Christmas and New Year period.
Mitchells & Butlers Plc has given a return of 5.37% to its shareholders in the last one year and its year-to-date return stands at 2.66% as of 21 January 2022. Its shares were trading at GBX 2662.40, down by 1.65% around 11:11 AM (GMT) with a market capitalization of £1,592.28 million on 21 January 2022.
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Loungers Plc (LON: LGRS)
FTSE AIM All-Share listed, Loungers Plc operates café, bars and restaurants across England and Wales through its brands, Lounge and Cosy Club. Loungers Plc has given a return of 30.41% to its shareholders in the last one year and its year-to-date return stands at -1.15% as of 21 January 2022. Its shares were trading at GBX 284 around 11:12 AM (GMT) with a market capitalization of £291.78 million on 21 January 2022.
Restaurant Group Plc (LON: RTN)
Restaurant Group Plc owns and operates restaurants and pubs across the UK and is listed on the FTSE All-Share Index. Recently, the group due to good cost control and continued strong trading relative to the market, the Group's FY21 Adjusted EBITDA is expected to be at the top end, and FY21 year-end Net Debt will be less than £180 million. However, LFL sales were 10% to 12% lower in December than in October and November last year.
Restaurant Group Plc has given a return of 47.01% to its shareholders in the last one year and its year-to-date return stands at 7.53% as of 21 January 2022. Its shares were trading at GBX 101.40, up by 1.40%, around 11:25 AM (GMT) with a market capitalization of £765.05 million on 21 January 2022.
PPHE Hotel Group Plc (LON: PPH)
PPHE Hotel Group Plc is a global hospitality real estate company that develops, owns, and operates full-service premium hotels and resorts under different brand names. Recently, the company benefited from an exclusive and perpetual licence from the Radisson Hotel Group to develop and operate Park Plaza branded hotels and resorts in Europe, Africa, and the Middle East.
PPHE Hotel Group Plc has given a return of 1.61% to its shareholders in the last one year and its year-to-date return stands at -3.18% as of 21 January 2022. Its shares were trading at GBX 1,392, down by 1.97% around 11:27 AM (GMT)with a market capitalization of £604.06 million on 21 January 2022.