The day many of us have been counting down to has finally arrived. April 12 marks the next phase of lockdown easing, meaning that after more than three months of closed doors England’s pubs, restaurants, bars and cafes will be allowed to re-open, albeit only for outdoor service.

There is a palpable sense of excitement surrounding hospitality reopening, seemingly even more so than was the case after the previous two national lockdowns. One possible reason for the added enthusiasm is very likely the belief held by many that thanks to the strong vaccine rollout there won’t be another lockdown. All these factors currently work together to lift consumer sentiment to levels well beyond those seen over much of 2020, as reflected in the YouGov/Cebr Consumer Confidence Index.

Apart from the boost to the national mood, reopening of hospitality also stands to bolster the economy. In pre-pandemic times, households across England spent a cumulative £663 million per week on dining and drinking out. In recent months, this has gone down to zero, apart for takeaways which are excluded from this analysis as they could continue even during lockdown.[1] The big question is, what will this figure rise to, now that venues are reopening?

One piece of data we can turn to in order to begin to answer this question is hospitality occupancy rates immediately after the first and second national lockdowns, which ended on 4 July and 2 December, respectively. According to OpenTable figures, which track seated diners from online, phone, and walk-in bookings, in the first week post lockdown one diner numbers rebounded to 33% of pre-pandemic levels. In the first week after lockdown two, the rebound was stronger with levels at 56% of the pre-pandemic norm. The most likely explanation behind the faster rebound after the second lockdown is increased comfort with socialising and being in busy surroundings, as people became more accustomed to living with the pandemic, despite the epidemiological indicators at the time not necessarily justifying this increased comfort.

With more than half of the population at least partially vaccinated, optimism at record highs and a good amount of cash savings and pent-up demand, there are many reasons to believe that demand for restaurants and pubs will rebound even stronger than after the previous two reopenings. Anyone who like me has been trying to get a dinner reservation for this week and found it impossible would surely tend to agree. Longer opening hours and expected price rises will also provide a revenue boost.

One factor which will be limiting hospitality revenues is that only outdoor service will be allowed until at least May 17. Research from CGA and Alix Partners puts the share of venues with outdoor space (including gardens and terraces, but also more innovative solutions like car parking) at just under 40%.[2] The shares vary widely between urban and rural settings, but with the relaxation of planning rules even city-based venues can make the most of whatever outdoor space they have and the share of venues opening is set to be somewhat higher than indicated as some busy parts of larger cities convert street space into temporary pedestrianised seating areas.[3]

Taking into account all of these factors we expect restaurants and other dining and drinking venues across England to take in £314 million from outdoor customers in the first week post lockdown. This will be on top of any revenue streams from takeaway orders. While this is only a fraction of the normal pre-pandemic levels, it will still provide a welcome boost to one of the country’s most impacted sectors. There is no question however that everyone will be keenly awaiting the confirmation that indoor hospitality will be allowed to resume from May 17, enabling many more venues to reopen and increase capacity.  

For more information, please contact:
Nina Skero nskero@cebr.com; Mobile: 07930 695728

[1] The figures refer to expenditure in restaurants and cafes and alcoholic drink away from home. Takeaways are excluded as they were able to continue even during lockdown.
[2]https://www.alixpartners.com/media/17471/alixpartners-cga-market-recovery-monitor-march21.pdf
[3] It is difficult to find data on the share of venues with no reported outdoor space that will still be able to open or the extent to which those with reported outdoor space will expand the space. Hence, based on anecdotal evidence, we have assumed a 25% bump.