Covid-19 ‘wrecks confidence’ in hospitality sector

CGA and Fourth have released their latest Business Confidence Survey which has revealed the scale of the challenges operators face in the run-up to Christmas.

The survey was based on responses from 121 leaders carried out in mid to late November 2020 who work at senior management levels. Further research was also included by members of UKHospitality, the British Beer and Pub Association and the British Institute of Innkeeping.

The survey showed how the Covid-19 pandemic has “wrecked confidence” across hospitality, with fewer than one in five (18%) leaders optimistic about the market’s prospects for the next 12 months.

Charlie Mitchell, research and insight director for CGA, said: “As we near the end of hospitality’s toughest year in memory, the bleak picture of the sector will come as little surprise. Suffocating restrictions across Britain will devastate trading in what should be businesses’ busiest time of the year.

“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.”

The government restrictions on trading and socialising over the autumn have reportedly led to more than a quarter (27%) of multi-site business leaders predicting their groups will be unviable within the first six months of 2021 if current levels of support continue.

However, twice as many leaders (35%) said they are “optimistic” about their own business’ prospects over the next year, reflecting a “substantial” increase from the last edition of the Business Confidence Survey.

There are also signs of “cautious ambition”, with more than two out of five (44%) leaders suggesting they intend to open new sites in 2021.

Sebastien Sepierre, managing director for Fourth’s 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.”

He added: “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.”