Tourism, Leisure and Hospitality Business Survey results
Wednesday, 05 June 2019
The results of MHA Larking Gowen’s fourteenth Tourism, Leisure and Hospitality Business Survey have just been published. High on the list of challenges was the weather in 2018! The weather played a big part in the trading results for a lot of tourism, leisure and hospitality businesses in the eastern region.
For businesses in the tourism sector, 2018, nicknamed recently as the “Goldilocks year” (so called because there was too much snow in March, too much rain at Easter and it was too hot for the summer), saw changes in customer spending habits, leading to mixed trading results.
Many tourism, leisure and hospitality businesses have said that the weather is a leading concern for them and in response there has been substantial investment into weather-proofing tourism attractions. This has helped increase visitor numbers and seen a boost to the economies of our region over recent years, with the economic value of the visitor economy across Norfolk, Suffolk and Essex now being worth over £8 billion.
Chris Scargill, tourism, leisure and hospitality partner at MHA Larking Gowen, said, “While we, as families, all got to enjoy the opportunity of being outside more, once the warm weather arrived, our spending habits changed, and we enjoyed more of the low cost outdoors, but this had significant impact on a number of tourism, leisure and hospitality businesses in the sector. It certainly isn’t all doom and gloom though, and we’ve seen some real positives, but there’s no doubt the unusual weather patterns impacted a number of businesses, and it came at a time when businesses are seeing rising costs in rents, business rates, and rising staff costs through legislation.”
Highlights of the survey
In 2018, we continued to see the loss of swathes of the high street and the national restaurant chains, with some only being saved by entering into company voluntary arrangements (CVAs) with their creditors and heavy negotiations on rents. For some, it really is quite tough out there.
The results of the tourism, leisure and hospitality survey indicated:
- 49% of tourism, leisure and hospitality businesses saw revenue levels increase
- 31% suffered a decrease in income
A big issue in 2018 was the increasing awareness on plastic waste. The tourism sector has clearly been doing its bit, with the majority of tourism, leisure and hospitality businesses reducing plastic in their cooking, cleaning, and purchasing habits. More can clearly be done around plastic waste:
- 61% of tourism, leisure and hospitality businesses felt local government could help them more in their endeavours
- 57% feel the drive should come from central government
A third of tourism, leisure and hospitality businesses have increased marketing spend, with many making more effort to use social media and ‘sell’ an experience. The use of Facebook and YouTube has remained consistent, but 80% of tourism, leisure and hospitality businesses this year reported an increase in their use of Instagram.
The results showed mixed results on tourism, leisure and hospitality business profits:
- Only two in five tourism, leisure and hospitality businesses saw an increase in profit levels
Chris comments, “Profit levels are essential to allow businesses to keep reinvesting, so it was good to see profits rise for a significant proportion of the tourism, leisure and hospitality sector, especially the fact that one in three tourism, leisure and hospitality businesses increased profits by over 10% compared to last year. But with nearly a third of businesses seeing profits fall, this could be a worrying trend, particularly as two-fifths of those making a loss this year are anticipating losses in 2019.”
However, for now, investment continues:
- 16% of tourism, leisure and hospitality businesses plan to extend their premises
- three in five plan site improvements and refurbishment to help improve business
2019 will inevitably be another interesting year for the tourism, leisure and hospitality sector!
To view the full tourism, leisure and hospitality survey results, download a copy here.
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