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Hospitality leaders show long-term optimism

Published:  25 February, 2021

Hospitality leaders are optimistic about the long-term future of the sector and its role in the UK’s economic recovery, with many businesses seeking to grow rather than shrink, the latest CGA Business Leaders' Survey has revealed.

Half (51%) of business leaders surveyed said they felt 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%.

Moreover, CGA said there was evidence that many businesses would be seeking to grow rather than shrink their portfolios – three in five (59%) leaders said they anticipated opening new sites in 2021, a notable increase of 11 percentage points since November, and much higher than the 31% that anticipated keeping some sites shut for good.

However, with no further government support in the Budget on 3 March, one in 10 predicted their businesses wouldn’t survive. 

Leaders said they were looking for extensions to a trio of measures – the business rates holiday, VAT reductions and the furlough scheme — as their top priorities. 

The survey also showed widespread calls for VAT cuts to be applied to alcoholic drinks too, and for business grants to be increased.

“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,” said Phil Tate, group CEO at CGA.

“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,” he added. 

The survey, sponsored by Fourth, also highlighted the crucial role of hospitality businesses in regenerating the UK’s economy and keeping people safe. 

More than four in five (81%) said hospitality could make a positive contribution to the UK’s post-Covid recovery by boosting the economy, while nearly nine in 10 (87%) believed their guidelines had been effective in ensuring the safety of both guests and staff after previous lockdowns.

In its latest lobbying, UK Hospitality earlier this month called on the industry to make its voice heard to secure further VAT cut and business rates holiday with the launch a ‘Budget’ campaign.