Hospitality sector experiences 76.6 percent slowdown

An analysis of 8,500,000 hours of real-time earnings shows clear impact of Covid-19 on workers in the hospitality industry.  

Here at Wagestream, we process a lot of workforce data. Our platform connects enterprise workplace data with personal finance data, and as a result we have a unique view into the devastating impact of Covid-19 on the UK hospitality industry. We have over 100 million hours recorded through the Wagestream platform to analyse.

As the outbreak continues to develop, we’ve been looking at how shifts patterns are changing through each stage of increased measures and lockdown. For this particular analysis, we looked at 8 million hours of labour in the UK hospitality sector from 1 January until 22 March.

Impact of hours worked

Hours worked in the hospitality industry have declined rapidly, largely impacted by people staying in to reduce the spread of the virus and now by the recent government announcement to close all non-essential businesses. The trend largely reflects the public’s concern as well as government statements. That being said, the decline shown below is due to fewer shifts available, not due to workers choosing to stay home. The number of shifts available to workers in the hospitality industry has reduced by 76.6% from the end of February to the end of March. 

Correlations with restaurant bookings

By accessing dining data available online through the restaurant booking platform, OpenTable, we can match hours worked in hospitality to dining out demand. As news of the virus spread and concerns grew, we can see dining demand decreasing and hours worked decreasing as a result.

The announcement from the government on the 9th of March, the first of many direct to the nation, marks the earliest significant drop off in hours worked within the industry, not seen in 10 years of historic analysis. Whilst the briefing did not specifically address staying home or staying away from pubs, restaurants or leisure clubs, the decline reflects a general sentiment to stay away from casual dining establishments. 

The usual weekend peak is experienced for March 14th to 15th, but from then on there is a general decline. The steepest decline comes after the government calls for all pubs, restaurants and leisure facilities to close. 

Employment Changes

As expected, the drop in demand has impacted our clients in various ways.

We predict 60% of hospitality clients have had to reduce the number they employ so far.

We compared employment changes from March versus a comparable time in January. 

So far, businesses are still working out what staff reductions are required and what the rules are on furloughed workers. At this point, staff reduction levels have not been too drastic.  The majority of clients have currently laid off less than 10% of staff. The UK’s Coronavirus Job Retention Scheme (CJRS), which helps cover 80% of employees’ wages, will help to keep this proportion low. 

Overall Impact

Assuming our dataset is representative of UK pubs and restaurants, then we expect 94k or 60% of businesses to have redundancies and 91k or 4% of workers to have been made redundant by the end of March. On average, we expect hospitality workers to have made only 40% in wages of what they expected for the month of March. Fortunately, with the CJRS, ‘furloughed’ workers will be compensated 80% of their wages. 

The Wagestream Response

Wagestream is facilitating instant payments of up to 50% of an employee’s furloughed income. Existing employers simply need to pass furloughed income data to Wagestream to issue furloughed income to staff. New employers who are not yet signed up with Wagestream can pay their furloughed staff within 1 hour of signing up through a simplified integration. For more information on how we can support your furloughed staff, click here.

All other Wagestream products are running as normal to make sure all workers are supported during this time.