Hospitality profits up despite staff shortage concerns

27-Aug-2015 - Last updated on 26-Apr-2021 at 18:29 GMT

Businesses fear that growing domestic competition and staff shortages could limit growth

Hospitality businesses reported healthy profit growth for the three months to August and remain positive about the future despite concerns over staff shortages.

According to the latest CBI Service Sector Survey of 176 firms including hotels, bars, and restaurants, 44 per cent of businesses are more optimistic about their situation than three months ago.

Forty-seven per cent said overall profitability was up, with the figure expected to rise by an average of eight per cent over the next quarter.

However, fears over a low availability of professional staff rose from 15 per cent to affect 23 per cent of businesses – the highest level since August 2007.

While 57 per cent of firms reported that the numbers of employees had risen, nine per cent said they had fallen with recruitment predicted to remain flat over the next quarter.

Just over half of businesses surveyed also expressed concern that growing domestic competition could limit growth in 2016, a rise of 20 per cent in three months.

Rain Newton-Smith, CBI Director for Economics, said: “After a weaker start to the year, the UK services sector is now seeing healthy growth across the board with firms becoming more profitable, driven by a surge in business volumes.

“Difficulties in finding staff with the right skills for firms to grow is a mounting concern, and with recent turbulence in the markets risk management skills are likely to be in demand.”

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