Hospitality industry surviving recession with ‘quick action and determination’, says BHA

27-Jun-2012 - Last updated on 26-Apr-2021 at 18:00 GMT

Recent months have seen some promising signs for the eating out sector and for hotels

With today’s release of revised gross domestic product (GDP) figures showing that the double-dip recession is deeper than originally feared, the British Hospitality Association (BHA) believes the hospitality industry can have something to smile about, having actually achieved growth during the final quarter of last year.

The figures show that GDP shrank by 0.4 per cent between October and December 2011, compared with a previous estimate of 0.3 per cent.

But the restaurant and pub sectors saw GDP increase, albeit by only one per cent, but in contrast with a 0.4 per cent decrease in the previous quarter.

“The GDP figures show that the hospitality industry is surviving the recession through quick action and quite a bit of determination,” a spokesperson for the BHA told BigHospitality.

“It continues to be tough, but there have very few job losses overall (probably some job gains) and people still want to eat out and go away for a break.”

“The economy is obviously still struggling and consumer spend remains restricted, which obviously affects the hospitality industry - so does the awful weather which is a deterrent for many to take a UK holiday and certainly has put a dampener on day visitor spend (worth £52bn last year).

“But it's localised to a certain degree. Interestingly, recent figures show that London hotels are powering ahead with record May occupancy, while provincial hotels continue to struggle.

“No figures are available, but London restaurants are probably doing that much better than those out of town - except that the good/high value restaurant, wherever it is, is probably prospering still.”

Promising signs…

Recent months have shown some promising signs for the eating out sector and for hotels. Restaurant and pub groups across the UK saw a welcome 2.6 per cent increase in collective like-for-like sales in May,with total sales up 6.5 per cent on the same month last year.

Meanwhile, having suffered a period of decline in the last quarter of 2011, the hotel sector bounced back at the beginning of this year,in London at least, with a seven per cent increase in profit per room and a 2.5 per cent rise in RevPAR. And then there’s the upcoming Olympics. But the BHA is unsure just how positive an effect the Games will have.

“Hotels have been active in their promotions, again with relatively few failures,” the BHA spokesperson added. “But this year, the Olympic Games are having an unsettling effect on the industry, inasmuch as there is some displacement of regular overseas visitors and we're still not sure how many new visitors the Games will attract.

“London and certain towns where Olympic events are held will benefit this year, but the benefit to UK tourism is more in the long term, when extensive TV coverage of the Games (and of the UK) will generate a boost in visitor numbers in future years.

“I think the restaurant industry, with relatively few failures, is dealing with the recession in reasonable shape. Restaurants have made significant customer offers, cut costs and redesigned menus to include less expensive dishes and, most importantly, maintained quality and value.

“These have been major factors in their continuing survival, although profits may be down."