Hospitality leaders remain confident, despite challenges
In spite of the current financial pressures businesses are facing, the optimism of hospitality leaders for the future of the sector continues to rise, according to CGA by NIQ’s Business Confidence Survey.
The survey, taken in October, revealed that 49% of leaders feel confident about the hospitality market over the next 12 months – a 4% increase on August’s figure. As for the proportion who think the prospects for their business in particular are good, that remains at 62%.
At present only 5% of leaders believe their business is at risk of failure, down from 11% in the previous quarter.
The hospitality industry is also about to enter a crucial period – Christmas. After the pandemic-related problems of 2020 and 2021, and last year’s rail strikes (if they happen again this festive period, an £800 million loss is predicted for the on-trade), December 2023 might be make or break for many businesses.
58% of those surveyed were optimistic about their Christmas trading, and 29% say more bookings have been made already, as opposed to 15% who said that reservations are down. Among those to be enjoying a booking boom is pub operator Fuller’s.
Karl Chessell, CGA by NIQ’s director – hospitality operators and food, EMEA, said: “These figures are another vote of confidence in hospitality and a sign that trading conditions may start to ease as inflation comes down. It’s encouraging to see good levels of optimism about Christmas sales, which can make or break the year for many restaurant, pub and bar groups.”
However, one major cause of consternation has been a rise in the National Living Wage to £11.44 an hour, with 38% of those surveyed expressing concerning over it. As restaurants have to pay staff more (according to CGA by NIQ, hospitality employee pay has increased by 10% in the last 12 months), the already tight profit margins will become even tighter – however, it has been suggested that better wages may help to improve the sector’s staff retention troubles.