Soaring inflation, a faltering economy and acute difficulties which surround the sourcing of key staff are creating instability for the hospitality sector. Yet in an interesting survey conducted by Barclays Corporate which polled 605 businesses during April, and report written by Mike Saul, Head of Hospitality and Leisure,Barclays Corporate reveals striking optimism about growth for the remainder of 2022.
The report revelaed that more than three-quarters (77%) of hospitality businesses are confident about the outlook for expansion this year, while one-third (33%) say they are extremely confident. Only 5% of those surveyed are not at all confident. The most upbeat regions are the North East and South West England, with 92% and 90% respectively declaring confidence. More than half of South West businesses (52%) are extremely confident. Businesses in London are by far the country’s least bullish, with overall confidence standing at just 54%.
It further went to show that after a very rocky couple of years, the restaurant trade now feels poised for better times: 96% expect growth and 45% are extremely confident. Confidence is also notably high among spas and wellness venues (88%), as well as holiday parks (80%).
Interestingly, the report revealed that hotel owners are the only part of the hospitality industry where a majority (56%) lack confidence that they can grow their businesses this year. These levels of confidence will undoubtedly be tempered if the impact of ‘stagflation’ deepens over the coming months; many operators are likely to face ever stiffer pressures.
For now, however, the upbeat mood is underpinned by widespread success in accelerating turnover to escape the low points of the acute Covid-19 period. On average, UK hospitality businesses expect to boost turnover this year by 30% above levels in the last ‘normal’ trading year of 2019. Based on the results, the Barclays modelling suggests that this increase represents a potential additional revenue of £36bn. Looking at the increase over 2021, when many businesses were hobbled at various points by pandemic restrictions, the extra value is even greater: almost £54bn.
Finally, the report held that the largest share of the increase over 2019 levels will be claimed by restaurants and other food outlets, which stand to gain almost £12bn. Pubs and bars could gain £7.3bn and hotels a similar sum. Although London businesses are least confident of growth, they do expect the biggest rise in revenue, at £9.2bn, followed by the South East (£5.7bn) and the North West (£5.1bn).