New Statistics prove Britain’s hospitality is looking up
CGA have released their findings for Q3 of 2023 in the Business Confidence Survey
The findings make pleasant reading, showing a surprising upswing in confidence around the hospitality industry. The survey questions both hospitality operators, industry leaders and the general public. It analyses consumer spending, inflationary figures and, importantly, consumer satisfaction.
The overarching message of the poll, one highlighted by CGA and affiliated organisations, is that 62% of leaders currently feel optimistic about prospects for their business. This is an increase of eight percentage points from the last survey in May. However, at NDML, we wanted to look more closely at the numbers and investigate the recent buoyancy of hospitality leaders, and if, in reality, the hospitality industry is starting to turn a corner.
Findings from the Business Confidence Survey
The first huge positive from the Business Confidence Survey is that there has been a reduction in hospitality business operators who believe their business is in imminent danger of closing. This has dropped from 14% in Q2 of 2023 to 11% in Q3 of 2023.
84% of hospitality leaders said they operated at a profit in the second quarter of the year, and 37% did so at a higher margin than in the same period last year.
Currently, 25% of independents say their business is at risk of failure in the next 12 months. This is a disappointing statistic; however it is a dramatic increase on last quarter’s, with a 15 percent reduction.
Why are profits increasing and nightlife businesses prospering?
Consumers are aware that their per-premise visit has increased.
When asked why their spending out has increased, the opinion of consumers vary between the below options, however prices far outweighed habitual reasons:
Price of food is more expensive – 62%
Price of drinks is more expensive – 54%
Treating myself more – 22%
Buying higher quality food when out – 16%
Celebrating more special occasions – 12%
More expendable income – 12%
Going out less often so treating myself when I do – 12%
Been having more drinks during visits – 11%
In the opinion of the consumer, it’s clear that price inflation has had a large impact on spend than spending habits. Despite the price increases, retention of consumers remains high, reflecting consumer loyalty in supporting the sector.
Another metric showed satisfaction with the hospitality sector from consumers remains high. When asked if they were satisfied with the below options, consumers surveyed replied so:
Quality of Food – 81%
Quality of Drinks – 80%
Quality of the Overall Experience – 80%
Quality of Service – 79%
Value for Money – 55%
Value for money is the lowest topic measured, showing consumer mindset around inflation has not changed or adjusted. Yet, the majority of consumers are satisfied with their spending and the value at venues.
In comparison with other industries, the hospitality stands out as a priority for consumers. When asked which of the following would they plan to prioritise over the next 12 months, even if their spending is reduced, they answered:
Visits to the premise – 44%
Clothing – 34%
Home improvement – 29%
International holidays – 26%
Day trips (including sport and leisure activities) – 24%
Domestic holidays – 23%
Vehicles – 21%
Importantly, since last month, visits to the premise and spending at a venue far exceeded other options as a protected pleasure in the minds of consumers. Indeed, 44% is a 4 percentage point increase compared to last month, once again reaffirming that opinions around the sector have improved. This increase of 4 outpaces any other spend, with most other spends reducing in likelihood compared, showing that time to visit hospitality venues is being prioritised – and we hope this upwards trend continues.
“We are delighted to finally see the hospitality industry moving in the right direction and that confidence is coming back into the sector. It’s been a cautious few years for the industry, having faced unprecedented hardship, but hopefully results in this quarter shows we have turned a corner.
Nightlife and hospitality businesses are essential to British culture and the British economy. At NDML, we will continue to advocate for our clients and the UK hospitality sector. We look forward to seeing the continued progress of clients, and the emergence of new businesses, boosting growth in the sector.”
– Victoria Romero-Trigo, Director of NDML
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