Hospitality and leisure to add extra £3.5bn to UK economy
The report also estimates that if a preference for UK holidays continues at the same rate in 2022, it will add up to £9.2bn to the domestic tourism market
The hospitality and leisure industry is predicted to contribute £3.5bn more to the nation’s GDP this year than in 2019, according to Barclays Corporate Banking.
In its new report, Leisure Rediscovered, Barclays’ data shows that the vast majority of hospitality and leisure businesses (94%) are confident about their growth prospects for this year following a post-lockdown surge in trade.
Based on projected sales figures for the period from April to December 2021, when the hospitality sector has largely been open again, this equates to £3.5bn more in Gross Value Added (GVA) than in the equivalent period in 2019.
The research also reveals new patterns in the way people are accessing hospitality and leisure services and changing consumer habits. For example, nearly half (45%) of consumers are prioritising UK holidays over those abroad. The most popular destinations are the Lake District, the South West of England and the Scottish Highlands.
Barclays Corporate Banking also estimates that, if a preference for UK holidays continues at the same rate in 2022, it will add up to £9.2bn to the domestic tourism market.
The report also shows that “significant numbers” of consumers are prioritising hospitality and leisure products that offer health and wellbeing benefits, strong sustainability credentials, or which come with particularly strong safety and hygiene standards.
It said that, on average, consumers are prepared to pay 19.9% extra for healthier food and drink options, and 17.8% for holiday accommodation that includes health and wellbeing services such as a gym or spa. More than nine in 10 (91%) of hospitality and leisure operators are now prioritising ‘healthy’ products among their portfolios.
In addition, while eating out or drinking, those aged 16 to 24 would be prepared to pay a premium of 35%, on average, for products with strong sustainability credentials. The average premium for 25-to-35-year-olds is 30%. Meanwhile, a sustainable holiday experience is worth 39% more to the youngest group, and 32% for 25s-to-35s.
Mike Saul, head of Hospitality and Leisure at Barclays Corporate Banking, said: “After a very difficult period for the hospitality sector, it is great to see how well the sector has bounced back. Our findings show an industry brimming with confidence and buoyed by surging revenues.
“However, it is also an industry that is undergoing a substantial amount of change – from the customers it serves to the products it sells.”
He added: “We have uncovered strong evidence that, particularly for younger customers, operators will need to place increased focus on healthy, sustainable and safe product ranges and to maintain investment in data and technology. Whilst the industry is navigating some short-term challenges around supply chains and labour shortages, operators that prioritise these areas will be an incredibly strong position for the long-term.”
