The poll indicates that 41% of leaders feel confident about prospects for their business over the next 12 months—a dip of 8 percentage points from August’s figure of 49%. It is a fourth quarter-on-quarter decline in a row, and optimism is now at its lowest point since October 2022, when inflation was hitting 40-year highs.
Meanwhile, only 20% of leaders feel optimistic about the future of hospitality in general over the next year—a near-halving from 36% just three months ago. Close to half (46%) say they are pessimistic about the next 12 months, which is double the number (21%) in August.
Growing negative sentiment follows tough trading conditions in the third quarter of this year. The proportion of leaders reporting a year-on-year increase in revenue has fallen from 64% to 41%—driven by moves by many consumers to cut their spending. Two thirds (65%) said their guest footfall has decreased year-on-year, while two in five (41%) have seen total spend drop. Just over half (54%) say visitors are buying fewer drinks, with only 10% observing an increase in purchases.
CGA’s Business Confidence Survey reveals the full scale of the costs facing hospitality at the moment. The research—which was conducted before the Budget—showed reform of business rates and VAT, and restraint on increases in National Living Wage and employers’ National Insurance, were leaders’ top four priorities for government, but the government’s announcement has delivered only small relief on these challenges.
Karl Chessell, CGA by NIQ’s director – hospitality operators and food, EMEA, said: “These numbers highlight the increasing polarisation of hospitality this year—between both consumers spending more or less, and leaders feeling optimistic or pessimistic. CGA’s research elsewhere shows some managed restaurant, pub and bar groups continue to grow sales and open new sites, but for many others this has been another challenging year. The Budget has fallen some way short of the support that business leaders were hoping for, and the increase in National Insurance contributions will put even more operators at risk of failure. Christmas trading may bring some relief, but longer term optimism is likely to stay very restrained well into 2025.”
Karl Chessell, CGA by NIQ’s director – hospitality operators and food, EMEA, said: “These numbers highlight the increasing polarisation of hospitality this year—between both consumers spending more or less, and leaders feeling optimistic or pessimistic. CGA’s research elsewhere shows some managed restaurant, pub and bar groups continue to grow sales and open new sites, but for many others this has been another challenging year. The Budget has fallen some way short of the support that business leaders were hoping for, and the increase in National Insurance contributions will put even more operators at risk of failure. Christmas trading may bring some relief, but longer term optimism is likely to stay very restrained well into 2025.”
The Business Confidence Survey from CGA by NIQ drew responses from leaders at CEO, MD, chair, board and other senior management levels, with combined oversight of more than 6,000 hospitality sites. The research was conducted in September and October 2024. To find out more, contact the experts here
