Only 6% of businesses in the hospitality sector are confident of growth across the summer, according to the latest research from Barclays Corporate Banking.
The study of over 300 senior hospitality and leisure executives found that on average, businesses predict their earnings will fall by 41% year-on-year against 2019 sales.
In addition, 39% said they have only been “kept afloat” by the VAT cut to 5%, with 40% of hospitality leaders noting that the reduction has been a “lifeline” for the sector.
Despite a rise in ‘staycations’ giving a “noticeable boost” in earnings for 76% of respondents, the robert found that overall, industry confidence will only reach “substantial” levels at the end of the year.
Only 30% of businesses anticipate growth in the autumn, while 83% believe growth will only be seen in winter.
The report also found that more hospitality businesses have been investing in new technology since the onset of lockdown.
Some 32% of respondents said the pandemic accelerated a ‘technological revolution’, with businesses looking to “boost long-term prospects” and open up new revenue streams in the short-term.
Mike Saul, head of Hospitality and Leisure, Barclays Corporate Banking, said: “The hospitality sector has been one of the hardest hit and the road ahead is tough.
“Whilst many bosses in the industry have essentially written off this year it is pleasing to see they are feeling more confident in the run up to winter and into next year.”
He added: “Despite the headwinds and uncertainty, this is a highly resilient sector that hasn’t stood still. To fulfil their long-term growth ambitions, companies used the lockdown period as an opportunity to innovate, refresh their business models and adopt new technology.
“Hospitality and leisure are full of smart, inventive, resourceful leaders who will ensure the future is bright and the present is as good as it can possibly be.”