Hospitality leaders remain cautiously optimistic for the future, with 47% feeling confident about prospects for their business over the next 12 months, up from 29% three months ago.
The 2023 Business Leaders Survey by CGA and Fourth, which polled leaders across Britain’s top managed hospitality groups, indicated a significant recovery in business confidence despite spiralling costs.
Despite the rise, 20% of leaders admitted to feeling pessimistic.
Three in 10 reported feeling confident about the eating and drinking out market in general – significantly higher than the 8% recorded in the previous survey – but still behind the 65% recorded in January 2022.
More than four in five (84%) of leaders said their businesses operated at a profit, with 51% more profitable than in 2021.
However, 14% of leaders said their business is at risk of failure in 2023 owing to difficult trading conditions.
Ninety-six percent reported experiencing higher food and drink costs, while a similar number reported cost increases in energy and front-of-house labour. This has led to average increases of 12% and 10% in food and drink menu prices respectively over the past 12 months.
Furthermore, 81% of leaders said they want to see a cut in VAT rates, while 61% would welcome business rates reform and 46% would welcome more generous support on energy costs.
Karl Chessell, CGA’s director - hospitality operators and food, EMEA, said: “After battling through three relentlessly challenging years, hospitality leaders are rightly upbeat about their long-term prospects. Pubs, bars and restaurants have coped admirably with the pressures forced on them, and consumers remain as keen as ever to eat and drink out when they are able. However, business confidence still lags well behind pre-COVID levels, and with few signs of respite on costs it is very clear that 2023 will be another difficult year. Hospitality is a dynamic and resilient sector, but thousands of fragile businesses need support on tax and bills if they are to ride out these immense challenges.”
Sebastien Sepierre, managing director – EMEA, Fourth, said: “The hospitality industry remains in a precarious position, despite this survey highlighting a growth in business and trading confidence compared to late last year. Sector businesses are continuing to fight a battle on multiple fronts, contending with workforce related challenges and soaring costs that are hitting supply chains hard. Technology plays a vital role in solving these challenges, helping businesses to engage and motivate employees, drive efficiency across the board, and identify and, ultimately, realise cost savings.”
