Hospitality businesses 'cautiously optimistic' about the future, new report says

By BigHospitality

- Last updated on GMT

Hospitality businesses 'cautiously optimistic' about the future, new report says

Related tags: Christie & co, Hospitality, Restaurant, Pub & bar

Hospitality businesses are cautiously optimistic about the future of their sector, according to Christie & Co’s latest Sentiment Survey.

The survey has found that one third of respondents say they feel positive about seeing some recovery in the second half of 2021 and 49% stating there is potential opportunity due to the successful vaccination programme, easing of restrictions and the strength of the domestic staycation market.

Almost half of respondents (48%) say they feel trade has been better than expected since reopening, reflecting the significant pent-up demand from consumers to return to hospitality venues, with 67% of respondents saying they feel positive about seeing some recovery in the second half of 2021, following ‘Freedom Day’ on 19 July. 

A large majority of respondents (83%) also believe it will take less than three years for the sector to return to pre-covid levels.

The survey also suggests buyer demand for hospitality assets will continue to outstrip supply in the second half of 2021, with 17% of respondents saying they will be looking to sell, while 24% saying they will be looking to buy. This is positive for sellers and may lead to more competitive bidding and dynamic pricing, says Christie & Co.

Sentiment around pricing has improved significantly, with 68% of those surveyed believing pricing will stay the same or increase, likely off the back of the strong return to trading since reopening. Following a further boost over summer, Christie & Co anticipates more operators will be confident to test the market from Q3 onwards.

“The first half of 2021 has seen owners hold off coming to market against a backdrop of continued government support and the anticipation of a strong bounce back, as restrictions have eased with the positive vaccine roll out,” says Stephen Owens, managing director of pubs and restaurants at Christie & Co.

“We have seen strong buyer appetite from both established operators and new entrants with more buyers than sellers helping to keep prices strong, particularly for freehold properties in coastal, countryside and lifestyle locations, with competitive bidding for prized assets.”

The pub market remained buoyant in the first half of 2021, against the challenging backdrop of a third national lockdown and prolonged period of operating restrictions, according to Christie & Co’s Pubs & Restaurants Mid-Year Review. Consumers responded positively to the reopening of pubs from 12 April, which translated to improving like-for-like trading performance and suggests the bounce-back for the sector will be strong, it says.

By contrast the UK restaurant market continues to struggle, with Christie & Co saying that the expected reverse in the decline in the value of the eating out market in 2021 is now likely to be delayed until the end of 2022 before it experiences a full revival.

Key challenges identified for the next six months include the staffing crisis facing the industry, rising costs and food and drink price inflation.

 

Related topics: Trends & Reports

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