Hotels see first positive economic growth since August 2021

Accommodation and food service activities grew by 8.6% in February 2022, marking the main services contribution to the UK’s gross domestic product (GDP) growth in February, with hotels and camping grounds seeing its first positive growth since August 2021.

According to the Office for National Statistics (ONS), this partly reflected a “bounce back” following weakness in both January and December due to the impact of Omicron.

The February increase was mainly driven by tourism-related industries with 33.1% growth in travel agency, tour operator and other reservation service and related activities on the month, following a growth of 1.4% in January 2022. 

Accommodation also grew 23%, and services is now 2.1% above its pre-coronavirus level.

However, GDP has slowed overall as the economy only saw 0.1% growth in February, down from a growth rate of 0.8% in January.

Meanwhile, services grew by 0.2% and was the main contributor to February’s growth in GDP, although this was partially offset by production which fell by 0.6%, and construction which fell by 0.1%.

Overall, consumer-facing services (retail trade, food and beverage activities, travel and entertainment) are now 5.2% below pre-coronavirus levels, while all other services are 4% above.

Output in consumer-facing services grew by 0.7% in February 2022, following a 2% growth in January. This was partially offset by wholesale and retail trade and repair of motor vehicles and motorcycles, the largest negative contributor in consumer-facing services.

Darren Morgan, ONS director of Economic Statistics, said: “The economy was little changed in February with the easing of restrictions for overseas travel – and increased confidence in booking holidays in the UK – triggering strong growth in travel agencies, tour operators and hotels.”