Here are ten top messages from the exclusive poll of our industry’s most influential and knowledgeable players.
1 Optimism is cautiously rising…
After nearly 12 months of very fragile business confidence, signs of an end to lockdowns have lifted leaders’ optimism. Half (49%) are now confident about prospects for the sector over the next 12 months—more than triple the number who felt the same way in November (18%). The number feeling confident about their own businesses has doubled, from 35% to 54%.
2 … But many challenges remain
One in ten (10%) leaders think their business will not survive if no additional support is announced in the Chancellor’s Budget next Wednesday (3 March)—and only a third (37%) predict they will return to profit this year without fresh help. “We’ve seen a reasonable uptick in confidence… but we’re very much still at a cliff edge,” said Karl Chessell, CGA’s business unit director – hospitality operators and food, EMEA.
3 More help is needed on rates and VAT
Business leaders’ clear priorities for government are extensions to a couple of key packages: the pause on business rates and cut in VAT. Prolonging these until March 2022 would help two thirds (66%) of businesses to return to profitability this year, the survey suggests. Extending the furloughing scheme, increasing grants and cutting VAT and duty on alcoholic drinks would all stimulate trade too.
There’s a real need for the government to step up and give support,” said Karl Chessell.
4 We can expect openings as well as closures
CGA’s Market Recovery Monitor tracked nearly 6,000 closures of licensed premises in 2020, and many more can be expected before hospitality reopens. But the number of leaders planning to keep some sites shut after lockdown has dropped from 36% in November to 31% in CGA’s latest survey. Three in five (58%) leaders now anticipate opening new sites in 2021—more than double the number in the third quarter of 2020 (26%)—and half (49%) expect new entrants to match or exceed levels seen in 2019. They indicate a revival in both growth and entrepreneurialism as 2021 goes on. “After a lean year we’ll hopefully see new investment,” said Karl Chessell.
5 Consumers are excited but cautious
CGA’s consumer research shows a tension between excitement at returning to hospitality after so long away, but lingering anxiety about safety. This is reflected in the Business Leaders’ Survey, with 98% of respondents agreeing pent-up demand will help their businesses in the next 12 months, but nearly three quarters (71%) expecting fragile confidence to hold back sales. CGA’s research and insight director Charlie Mitchell said trends after last year’s spring lockdown, which saw well over half of consumers return to venues within a month of reopening should provide encouragement. “The really positive thing is that when consumers visited they felt confident enough to go again. There’s a job to be done to build confidence and overcome the nervousness that’s apparent.”
6 Spending may polarise
CGA’s Business Leaders’ Survey and consumer research both point to potential polarisation in the market after lockdown. Just over half (56%) of leaders expect increased demand for high-end offerings will have a positive impact on their business—but nearly as many (49%) think the same about value offerings.
There will be a set of consumers who have managed to save and will be looking forward to coming back out and treating themselves… but on the other hand there will be a lot who have been impacted negatively financially. For operators, the key takeout is knowing your audience and tailoring your offer accordingly.”
7 Staff engagement is still crucial
With so many job losses lately, access to labour will not be as challenging as it was before the pandemic. But with only 14% of leaders not anticipating recruiting any new staff in 2021, competition for talent could increase as the market recovers, which will make good staff engagement as vital as ever. CGA’s Hospitality Professionals research shows a clear link between engagement and the satisfaction of staff, so investing in it now could avoid labour shortages in the future.
8 Technology is now at the core of hospitality
The pandemic has dramatically accelerated hospitality’s adoption of technology, and 95% of leaders think it will be important in their operations after lockdown. The Business Leaders’ Survey shows businesses have grown much more confident with digital solutions over the last year, with frustrations around integration and data overload down.
2020 was a year of rapid adoption—a lot of it driven by necessity,” said Charlie Mitchell. “It’s really given operators the chance to see where they can make efficiencies,” agreed Max Tucker, director of analytics, EMEA at Fourth at the webinar.
9 Tech can support planning in a volatile market
Given the unpredictability of footfall after lockdown, technology will be particularly crucial in managing staff costs. “Tech has a big part to play in understanding the new trading environment… it’ll be about getting labour scheduling right and not impacting on customer satisfaction because you don’t have enough staff,” said Max Tucker. With many consumers likely to be planning their hospitality visits carefully, smart use of online booking tools will be important too.
10 Hospitality can power the UK’s recovery
CGA’s Business Leaders’ Survey shows widespread confidence that hospitality can boost the economy, create jobs and support communities in the aftermath of damaging lockdowns—which makes not being able to reopen before mid-April disappointing. “The delay is a huge frustration.. the sector has a big role to play in the country’s recovery,” said Karl Chessell.
CGA’s Business Leaders’ Survey is conducted in association with Fourth. It was carried out from 5 to 15 February alongside research for UKHospitality, the British Beer and Pub Association and the British Institute of Innkeeping, with a total of 726 responses.
For more information about the Business Leaders’ Survey, including bespoke analysis to help suppliers and operators optimise strategies for recovery in 2021, email email@example.com.