Hospitality leaders 'increasingly optimistic' about 2022 prospects
The exclusive poll of multi-site business leaders shows 65% are confident about the next 12 months for the market — an increase of six percentage points since the last survey in December 2021. The number of leaders feeling confident about their own business’ prospects has nudged up by two percentage points to 68%.
“After two years of Covid-related disruption, our survey shows that multi-site businesses are finding their feet again,” says Phil Tate, CGA group CEO.
“Hospitality remains a very attractive sector for consumers and investors alike, and as we move into the second quarter of 2022, we can be cautiously confident that sales and profits will continue to build.”
The survey indicates improved profitability in the hospitality sector. More than four in five (84%) leaders say their business is currently operating at a profit—four percentage points higher than in the December survey. Only 5% of leaders say they are making a loss.
However, hospitality’s recovery from the pandemic is being threatened by mounting costs for both businesses and consumers. More than four in five (93%) leaders say they are concerned about inflation in food and drink prices, and nearly as many (79%) are worried about the public cost-of-living crisis. Almost two thirds (63%) are concerned about VAT and the end to relief for the hospitality sector, and there is widespread anxiety about rising costs in energy, labour and other key inputs.
Nine in 10 (90%) leaders say they have been impacted by higher costs across the supply chain. The large majority have passed, or are planning to pass, some of the costs on to consumers via higher food prices (87%). On average, menu prices are rising by 8%.
Operators also face ongoing problems in the supply chain, which began after Brexit and accelerated during COVID-19. Four in five (82%) have seen products not turning up and large numbers have faced reduced product lines (77%) and delayed deliveries (64%).
“While it’s encouraging to see business confidence climb, the impact of rising costs, supply chain issues and the ongoing recruitment challenge continues to be extremely threatening to the sector,” says Sebastien Sepierre, managing director – EMEA, Fourth.
“These challenges are amplified by the return to 20% VAT rates and the National Living Wage rise – both of which came into force last week and are set to hit finances hard, at a time the industry can ill afford.
“It’s vital that businesses continue to do everything they can to plan ahead, in order to protect their bottom line and also maximise efficiencies related to their workforce and inventory.”
The Business Leaders' Survey was undertaken between 9 February and 21 March 2022 and represents over 14,000 sites. Respondents were 66% CEO/MD level, 31% Chair and board level, and 3% other senior management.
