Hospitality leaders optimistic despite rising cost concerns

By Hannah Thompson contact

- Last updated on GMT

Hospitality leaders optimistic despite concerns about rising costs

Related tags: Cent, Economics

The hospitality industry has rising concerns about cost rises and property price hikes, a new survey suggests, although optimism about business prospects overall is growing.

Almost four in five of the senior level business leaders asked – who together represented 190 businesses in Britain ‒ were either very concerned (41 per cent) or concerned (39 per cent) by rising costs of items such as vegetables, and lower availability.   

In the Business Leaders’ Survey by CGA Peach, property was also an issue, with over half either very concerned (31 per cent) or concerned (23 per cent) by property costs, primarily thanks to soaring rental prices in cities, especially in London.

Wage bills were also on the agenda, with a majority either very concerned (24 per cent) or concerned (35 per cent) about it at the start of 2017.

However, over half said they were either very optimistic (10 per cent) or fairly optimistic (57 per cent) about their business prospects in the next 12 months.

London-based businesses are more positive than those nationwide however, with 57 per cent feeling optimistic compared to just 42 per cent of businesses with a national spread.      

Younger businesses (less than five years’ old) were also most likely to feel very optimistic (25 per cent said they were) compared to just seven per cent of those running for more than 10 years.

Forecasts for 2017 were ambitious, with a fifth of leaders (21 per cent) looking to open at least ten sites in 2017, and just under a third (29 per cent) looking for a business acquisition in the next 12 months.

“Our Business Leaders’ Survey reveals a sector facing a barrage of input costs in property, food and people,” says Peter Martin, CGA Peach vice president. “But this is a positive industry that is very much on the front foot rather than in retreat, and that deserves government support to ease its burden of expenses.

“Operators will have to ride out some big challenges in 2017, but strong, differentiated operators that can deliver a compelling offer while keeping a tight rein on their costs are well placed to thrive, both this year and well beyond."

Related topics: Business, People, Trends & Reports, Venues

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