Research from Barclays Corporate Banking has found that 94% of hospitality and leisure operators are confident about growth this year following a post-lockdown surge in trade with a boom in staycation tourism potentially adding up to £9.2bn to the economy.
Findings from its new report Leisure Rediscovered show that based on projected sales figures for the period from April to December 2021, when the hospitality sector has largely been open again, hospitality and leisure business will contribute £3.5bn more in Gross Value Added (GVA) than in the equivalent period in 2019.
The research also indicates a growth in the UK staycation market next year with 45% of consumers prioritising UK holidays over those abroad. Barclays Corporate Banking estimates that, if a preference for UK holidays continues at the same rate in 2022, it will add up to £9.2bn to the domestic tourism market.
Other findings include the growth in popularity of neighbourhood businesses, with 41% of consumers saying they are now more drawn to go out for entertainment in their local neighbourhoods than further afield.
The report also shows that significant numbers of consumers are prioritising hospitality and leisure products that offer health and wellbeing benefits. On average, consumers are prepared to pay 19.9% extra for healthier food and drink options, it found, with 91% of hospitality and leisure operators now prioritising ‘healthy’ products among their portfolios.
While eating out or drinking, those aged 16 to 24 are prepared to pay a premium of 35%, on average, for products with strong sustainability credentials. The average premium for 25-to-35-year-olds is 30%.
The delivery boom during lockdown has not subsided since the pandemic, according to the report, with 40% of businesses reporting continued popularity of home delivery and click-and-collect services
“After a very difficult period for the hospitality sector, it is great to see how well the sector has bounced back. Our findings show an industry brimming with confidence and buoyed by surging revenues,” says Mike Saul, Head of Hospitality and Leisure at Barclays Corporate Banking.
“However, it is also an industry that is undergoing a substantial amount of change – from the customers it serves to the products it sells. We have uncovered strong evidence that, particularly for younger customers, operators will need to place increased focus on healthy, sustainable and safe product ranges and to maintain investment in data and technology.
“Whilst the industry is navigating some short-term challenges around supply chains and labour shortages, operators that prioritise these areas will be an incredibly strong position for the long-term.”