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Highlights
- A new report has revealed that hospitality businesses affected by the rising cases of omicron have received less than half of the £635-million support package provided by the UK government.
- The UK Treasury had announced a support package to the worst-hit hospitality industry.
A recent report has highlighted that hospitality businesses affected by the rising cases of omicron have received less than half of the £635-million support package. The UK Treasury announced the package to provide some support to the ailing hospitality industry due to mass cancellations and declining footfall due to increased covid cases in December, besides the staff and supply chain crisis.
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According to the Altus Group’s analysis of the data, the support package included one-off grants of up to £6,000 per premises for businesses in the hospitality, accommodation, and leisure sector in England, where councils were entrusted to provide the grants by 31 March. Around 29 councils have failed to provide any funds to the eligible businesses struggling to recover from the pandemic.
There were hopes that chancellor Rishi Sunak will announce some supportive measures in his Spring statement, especially freezing Value Added Tax (VAT) at 12.5%. But the Chancellor decided to let the VAT levels return to 20% from April 2022 after dropping to 5% during the pandemic.
With the rising costs of raw materials, energy, and shortage of manpower, taking back the VAT rates would only increase challenges for the already ailing hospitality industry, which will eventually be passed on to the customers.
Let us look at 3 FTSE-listed hospitality stocks that may get affected by the lack of support from the government.
Intercontinental Hotels Group Plc (LON: IHG)
The FTSE100-listed firm is a multinational hospitality company, Intercontinental Hotels Group Plc franchises its brands and manages its hotels on behalf of third-party hotel owners.
The company has reported an increase in total revenue by 21% to US$2,907 million in FY2021, from US$2,394 million in FY2020 and its operating profit stood at US$494 million in FY2021, from the loss of US$153 million in FY2020.
The company’s share value has appreciated by 2.10% over the last one year as of 4 April 2022, while its year-to-date return stands at 7.72%. With a current market cap of £9,476.84 million, its shares were trading at GBX 5,146.00, down by 0.08%, at 8:05 AM (GMT), as of 4 April 2022.
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Mitchells & Butlers Plc (LON: MAB)
The FTSE250-listed firm is one of the largest operators of restaurants, pubs, and bars in the country. It offers a range of eating and drinking-out experiences through its well-known brands.
The company’s share value has depreciated by -24.70% in the last one year as of 4 April 2022, while its year-to-date return stands at -6.17%. With a market cap of £1,430.13 million, its shares were trading at GBX 240.20, up by 0.25%, at 8:05 AM (GMT), as of 4 April 2022.
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Whitbread Plc (LON: WTB)
The FTSE100-listed leading hospitality firm is the owner of Premier Inn and operates across the UK and Germany. The company’s share value has depreciated by -17.14% over the last one year as of 4 April 2022, while its year-to-date return stands at -3.44%. With a market cap of £5,803.86 million, its shares were trading at GBX 2,890.00, up by 0.59, at 8:05 AM (GMT), as of 4 April 2022.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
