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Hospitality confidence plummets amid rising costs and falling footfall

Only 41% of industry leaders are optimistic about their business prospects for the next 12 months, an 8% drop since August and the fourth consecutive quarterly decline. Confidence levels now match October 2022 lows, when inflation reached a 40-year high.

Outlook for the hospitality sector as a whole has darkened even further. Only 20% of leaders are optimistic about the industry's overall future over the next year – almost half the 36% recorded three months ago. Pessimism is mounting, with 46% of leaders expressing a bleak outlook for the coming year, more than doubling from 21% in August.

• Read more: Surge in temporary alcohol licences supports hospitality
  

This negative shift coincides with tough trading conditions in the third quarter, as consumer cutbacks hit revenues and footfall. Just 41% of leaders report year-on-year revenue growth, down from 64% earlier in the year. Footfall has also declined for two thirds of businesses, with 41% noting a decrease in total spend per guest. More than half (54%) report that visitors are buying fewer drinks, with just 10% seeing any increase.

CGA’s survey highlights the critical financial pressures on the sector, which have only been partially alleviated by the government’s recent Budget. Leaders prioritised relief on business rates and VAT, as well as limits on National Living Wage and National Insurance increases, yet received only minor concessions.

Karl Chessell, CGA by NIQ’s director — hospitality operators and food, EMEA, commented on the findings: “These numbers highlight the increasing polarisation of hospitality this year – between both consumers spending more or less, and leaders feeling optimistic or pessimistic. 

“CGA’s research elsewhere shows some managed restaurant, pub and bar groups continue to grow sales and open new sites, but for many others this has been another challenging year. The Budget has fallen some way short of the support that business leaders were hoping for, and the increase in National Insurance contributions will put even more operators at risk of failure. Christmas trading may bring some relief, but longer term optimism is likely to stay very restrained well into 2025.”

The survey, conducted in September and October 2024, collected responses from leaders at CEO, MD, chair, board and other senior management levels, collectively overseeing over 6,000 hospitality sites.

• rising costs
• consumer spending
• hospitality sector
• government support
• national insurance
• business confidence survey
• CGA by NIQ
• revenue decline
• Hospitality confidence
• falling footfall
• business outlook