Confidence of hospitality bosses falls for fifth quarter in a row
Optimism is now said to be at its lowest point since late 2022, and its second lowest since the Covid lockdowns since 2020
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The confidence of hospitality leaders has fallen for the fifth quarter in a row as pressure mounts on operating costs, according to CGA by NIQ’s latest Business Confidence Survey.
The poll revealed that only 33% of leaders feel confident about prospects for their business over the next 12 months – 8% down from October’s figure of 41%.
Optimism is now said to be at its lowest point since late 2022, and its second lowest since the Covid lockdowns since 2020. Confidence is even more fragile among independent operators at just 12%.
Meanwhile, only 14% of all leaders surveyed feel optimistic about the future of hospitality in general over the next year – 6% lower quarter-on-quarter and barely a this of the level of 41% recorded in January 2024.
The fall in optimism comes despite solid trading for many hospitality groups over Christmas, as well as stability in venue numbers and easing of inflation in some areas. Some 43% of the surveyed leaders said their fourth quarter trading was ahead, while 40% said it was level year-on-year.
However, only 31% said they increased their profits, with 29% saying their profits had dropped.
Profitability has been eroded by fast-rising labour costs, according to the survey, 47% of respondents said their wage costs have “significantly” increased in the last 12 months, with another 52% saying they had increased. High numbers also report at least some increases in the cost of food and drink (79%), energy (57%) and rent (39%).
The strain on costs is set to worsen from April, when employers face extra labour costs. More than four in five (84%) leaders say the planned reduction in National Insurance contribution thresholds will have a very negative impact on their business. Well over half will be very negatively affected by increases to NIC rates (62%) and increases to the National Minimum Wage (53%).
This will have significant impacts for businesses, and well over half of leaders say it will force them to cancel investment (64%), reduce staff levels (59%) and reduce employee benefits (57%). Smaller numbers say they will have to defer pay increases, cut training, reduce trading hours or close sites.
