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Cautious optimism returns for hospitality’s businesses prospects

Published:  07 December, 2020

A new survey has revealed a rise in optimism among hospitality operators for the future of their business over the next 12 months, albeit from a very low threshhold – but representing a substantial increase from the third quarter of the year.

The latest Business Confidence Survey from CGA and Fourth shows that of the hospitality operators surveyed, 35% expressed optimism about their own business prospects over the coming year.

There was also cause for optimism in terms of high street investment, with 44% of business leaders intending to open new sites in 2021.

“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,” CGA’s research & insight director Charlie Mitchell, said.

“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.”

The figures reveal a marked upturn in confidence levels as the new year and promise of a vaccine looms.

However, there’s no getting away from the toll that the pandemic has taken on hospitality operators this year. While business leaders showed an increase in optimism about their own businesses, fewer than 18% were optimistic about the market as a whole over the next 12 months.

The figure is in stark contrast to pre-pandemic levels of 60% in February. The fourth edition of the survey, which was carried out in mid to late November 2020, also showed that extended restrictions on trading and socialising over the autumn led more than a quarter (27%) of multi-site 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 are at even greater risk of failure, the survey shows.

CGA’s research, supplemented by a poll of members of UKHospitality, the British Beer and Pub Association and the British Institute of Innkeeping, also shows the damaging impact of England’s tiered system of restrictions. Nine in 10 (88%) leaders say 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.

Sebastien Sepierre, Fourth's managing director for 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.”

The CGA Fourth Business Confidence Survey is based on responses from 121 leaders working at CEO, MD, chairman, director or other senior management level, with further research of members of UKHospitality, the British Beer and Pub Association and the British Institute of Innkeeping.





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