London hospitality sector stabilises in Q1
London’s city centre is the most significant hospitality market in the UK, with nearly 3,000 licensed premises which is more than Britain’s six next biggest city centres put together
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The hospitality industry in London has shown signs of recovery in the first quarter of the year, with a net decline of only 1% of licensed premises, according to new data from CGA strategy.
This follows a net decline of just 0.2% in Q4 2022, a massive improvement from the 15.6% net decline the city saw between March 2020 and March 2023.
This heavy decline showed London’s reliance on commuters and tourists, both overseas and domestic. However, as office workers and tourists continue to return the decline may now be bottoming out.
This improving picture is reinforced by figures from the Coffer CGA Business Tracker, which has shown that year-on-year sales growth for managed operators within the M25 has been around twice as high as in the rest of Britain over the first few months of 2023.
Karl Chessell, CGA’s director for hospitality operators and food, EMEA, said: “This slowdown of closures is a very welcome sign for London’s hospitality scene, which was disproportionately hit by Covid lockdowns and working from home. London businesses still face some daunting challenges including high inflation and labour shortages, and more closures can be expected—but it’s clear that the sector is back on its feet.”
Graeme Smith, managing director at AlixPartners, added: “This stabilisation of such an important hospitality market is encouraging and clearly underpinned by a return of significant footfall to central London. We may see ongoing closures as more vulnerable and indebted businesses succumb to the demanding trading environment.
“However, we know that London remains a highly attractive market in the longer term, for strong operators with well-defined and differentiated propositions. As inflationary cost pressures ease, we would expect to see the capital return to site growth—possibly as soon as the third or fourth quarter of this year.”
London’s city centre is the most significant hospitality market in the UK, with nearly 3,000 licensed premises which is more than Britain’s six next biggest city centres put together.
