Hospitality Landscape: Balancing Confidence and Hurdles Amid Revenue Expansion

by XPRESS, 15 May 2024

The UK's hospitality sector is treading cautiously, with industry leaders expressing restrained optimism regarding revenue growth, as revealed by the latest CGA by NIQ Business Confidence Survey.

Despite a slight increase in positivity, only 34% of leaders hold a positive outlook for the hospitality market in the next year – a drop from 41% in February.

Confidence within individual businesses has also seen a slight decrease, slipping from 57% to 53%.

This marks the second consecutive quarterly decline following four quarters of steady growth.

Nevertheless, there are encouraging signs, including a notable two-thirds increase in leaders reporting improved revenue in Q1 2024 compared to Q1 2023.

Wage pressures remain a significant concern, with nearly all leaders (97%) reporting a rise in wages over the past year, averaging at 8.8%.

Although labor costs remain burdensome, there has been some relief in other areas – 38% of leaders have seen a decrease in energy costs, while 31% have observed a reduction in food and drink expenses.

The survey also indicates a reduction in job vacancies, with only 6% of positions currently unfilled, down from 10% in February.

Despite ongoing wage pressures, there are positive indicators in consumer spending and investment intentions.

Consumer confidence in spending has shown a cautious increase this year, and leading restaurant, pub, and bar groups have reported sales growth exceeding inflation at 5.2% in March.

Half (50%) of leaders are planning to increase investment over the next year, outnumbering those planning to decrease it by nearly double.

Karl Chessell, Director of Hospitality Operators and Food, EMEA at CGA by NIQ, stressed the importance of these positive developments, stating: "The promising signs in consumer spending and cost pressures are gradually

instilling confidence and accelerating plans for future investment."