Hospitality leaders are optimistic about the long-term future of the sector and its role in the UK’s economic recovery—but urgent support is needed to sustain businesses through to reopening.
Those are among the headlines from the CGA Business Leaders’ Survey 2021, sponsored by Fourth, which sets out the extreme vulnerability of many firms, as well as cautious confidence for renewal in the second half of the year. The Survey was conducted in collaboration with UKHospitality, British Beer and Pub Association and British Institute of Innkeeping.
It shows that one in ten (9%) leaders predict their businesses will not survive if no additional support is announced in the Chancellor’s Budget on Wednesday (3 March). Only just over a third (37%) think their businesses can return to profit this year without fresh support.
But there are also signs of confidence about prospects from mid-April, when a limited restart of hospitality is due to begin. Half (51%) of business leaders surveyed by CGA are confident about prospects for the sector over the next 12 months—more than triple the number who felt the same way in November (14%). The number feeling confident about their own businesses has doubled, from 27% to 54%.
There is evidence that many businesses will be seeking to grow rather than shrink their portfolios. Three in five (59%) leaders anticipating opening new sites in 2021—a notable increase of eleven percentage points since November, and much higher than the number of leaders (31%) who anticipate keeping some sites shut for good.
Phil Tate, group CEO at CGA, said: “This survey shows business leaders will be walking a tightrope in 2021. Nearly 12 months on from hospitality’s first compulsory closure, many thousands of venues and jobs have now been lost for good. But it’s also encouraging to see that many businesses are optimistic about long-term prospects, and confident enough to be thinking about opening rather than closing sites. It’s clear that a year of significant churn lies ahead, and as in all periods of crisis there will be winners as well as losers.”
The exclusive Business Leaders’ Survey highlights the crucial role of hospitality businesses in regenerating the UK’s economy and keeping people safe. More than four in five leaders (81%) think hospitality can make a positive contribution to the UK’s post-COVID recovery by boosting the economy, while nearly nine in ten (87%) believe their guidelines have been effective in ensuring the safety of both guests and staff after previous lockdowns.
But leaders stress the need for more government support between now and the reopening of hospitality, identifying extensions to a trio of measures—the business rates holiday, VAT reductions and the furlough scheme—as their three top priorities. The Survey also shows widespread calls for business grants to be increased.
This is a dynamic and innovative industry that is loved by consumers across the UK, but its resilience is being tested like never before,” said Phil Tate. “Support from government, investors, suppliers and landlords alike will be vital if hospitality is to play a full part in our country’s economic revival in 2021 and beyond.”
Sebastien Sepierre, managing director EMEA at Fourth, said: “Make no mistake, the past twelve months have been the most challenging our industry has endured during our lifetime. Nevertheless, the figures clearly show there is cautious optimism returning to some areas of the sector, as operators look ahead to life past the pandemic. What’s clear, is that the new landscape and operating climate of the hospitality industry will be fundamentally different to pre-pandemic, with a greater focus on driving efficiencies. Technology will be a pivotal tool in helping achieve this and we will be working as closely as ever with the industry and our partners to help them navigate the coming months and come back better.”
For more information about the Business Leaders’ Survey, including bespoke analysis to help suppliers and operators optimise strategies for recovery in 2021, email email@example.com.