The exclusive poll shows just under half (49%) of sector leaders feel confident about prospects for their business over the next 12 months. This is down by four percentage points from May’s figure of 53%, and a third consecutive quarter-on-quarter drop. However, 36% feel optimistic about prospects for hospitality in general over the next year—a quarter-on-quarter rise of two percentage points, but nine percentage points behind the level of August 2023.

Hospitality’s confidence has been sapped by high inflation, and challenges in several key areas continue, especially labour, where nearly three in five (58%) leaders have experienced significant increases in wage costs in the last 12 months, the reach finds.

Three quarters (75%) have seen at least some increases in food costs. These pressures, alongside a drop in footfall as some consumers reduce their visits to pubs, bars and restaurants, have led a third (33%) of leaders to reduce trading hours in their estates, the report concludes.

While confidence remains guarded, there are signs that optimism may start to build as inflation eases in some costs. Half (50%) of leaders have seen a reduction in their energy bills over the last 12 months, and more than half (56%) have not seen any further increase in renting costs. 

Only 9% think their business is at risk of failure in the next year, while the number trading at a loss has dropped by five percentage points year-on-year, to 9%. Separate research from CGA by NIQ has meanwhile shown solid year-on-year growth in sales for managed hospitality groups, and a modest increase in outlet numbers.

“The nervousness is understandable. A new Government may bring some stability to legislative decision-making, but down-beat assessments of the economy and state of the nation’s institutions and infrastructure will not help optimism - neither will speculation about out-door smoking bans. The last thing the industry needs is tinkering,” said Peach 20/20 co-founder Peter Martin.

The Business Confidence Survey highlights where leaders would like to see support for the hospitality industry from the new government, tax being a key area. Asked about policy changes to help growth, nearly nine in 10  (88%) respondents said reform of business rates was a top-three priority, with a targeted reduction in VAT (67%) and more sustainable increases in the National Living Wage (52%) among other top concerns. The survey confirms widespread support for two of Labour’s manifesto pledges—to revamp the rates system and replace the apprenticeship levy with a broader growth and skills levy.

Karl Chessell, CGA by NIQ’s director - hospitality operators and food, EMEA, said: “After more than four years of disruption from COVID and inflation, hospitality’s leaders are understandably circumspect about the future. With pay and food costs still rising and many consumers still feeling the pinch on spending, it’s not surprising that there has been no post-election bounce in optimism. However, long-overdue respite in energy and rents will have loosened the squeeze on operators’ margins, and we can be optimistic that an easing of consumers’ costs will free up more spending in the final few months of 2024. Confidence will need to stay very cautious for some time to come, but with the right support from the new government hospitality will be well-placed to power economic growth and create jobs.”
 
The Business Confidence Survey from CGA by NIQ drew responses from leaders at CEO, MD, chair, board and other senior management levels, with combined oversight of more than 8,000 hospitality sites. The research was conducted in July and August 2024.

CGA by NIQ is a Peach 20/20 partner.