Hospitality's confidence shattered with fewer than one in five optimistic about market's prospects
The Covid-19 pandemic has wrecked confidence across hospitality, with fewer than one in five (18%) leaders optimistic about the market's prospects for the next 12 months.
This is according to the new business confidence survey from CGA and Fourth. The figure was 42 percentage points down on the pre-pandemic level of 60% in the February edition of the survey. Extended restrictions on trading and socialising over the autumn have led more than a quarter (27%) of multisite business leaders to predict their groups will be unviable within the first six months of 2021 if current levels of support continue. Single-site businesses were at even greater risk of failure.
However, twice as many leaders (35%) said they were optimistic about their own business' prospects over the next year—a substantial increase from the last edition. There were also signs of cautious ambition, with more than two in five (44%) leaders intending to open new sites in 2021.
CGA's research, supplemented by a poll of members of UKHospitality, the British Beer and Pub Association (BBPA) and the British Institute of Innkeeping (BII), revealed the particularly damaging impact of England's tiered system of restrictions. Nine in 10 (88%) leaders said pubs, bars and restaurants will be unviable or loss-making in Tier 2 regions of England, where well over half (59%) of licensed premises are located.
CGA's research and insight director Charlie Mitchell said: "As we near the end of hospitality's toughest year in memory, the bleak picture of the sector will come as little surprise. Suffocating restrictions across Britain will devastate trading in what should be businesses' busiest time of the year.
"Leaders' optimism is at least rising from the rock bottom level of our last survey, and news of a vaccine is a reason for cautious hope of recovery in 2021. However, this week's Tier 2 restrictions in England and strict new limits in Wales could be fatal for smaller business in particular, making the case for more relaxed trading conditions and better government support even more urgent."
Sebastien Sepierre, Fourth's managing director – EMEA, said: "Hospitality has always been a resourceful, optimistic and innovative sector, something we're immensely proud to be a part of. Despite these strong characteristics, the results clearly paint a stark picture for leaders' optimism levels across the sector, as businesses look to negotiate the ever-moving goalposts of government restrictions, during what is traditionally the busiest period of the year.
"With cautious optimism on the horizon, in the form of a vaccine, there still remain many challenges in the year ahead, such as the availability of goods and labour, after we exit the EU Customs Union. We will continue to work tirelessly with businesses to help them harness the power of technology and data to tackle what lies ahead."
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