What does the future hold for hospitality in the UK?
Just over one month on from the easing of the majority of Coronavirus restrictions, signs of economic recovery are all around, with growth reaching 4.8% in Q2 – before remaining restrictions were lifted. There are, however, challenges remaining for some sectors of the economy, with staff shortages and supply chain issues putting the brakes on the pace of growth, while the ‘pingdemic’ has in many cases worsened the problem.
Yet the pandemic has shifted the consumer mindset significantly. As founders of hospitality and leisure businesses navigate their recoveries amidst a newly-changed landscape, shifts in consumer spending and behaviours are offering a light at the end of the tunnel. Research from IW Capital reveals that over 63% of consumers are going to support independents and small businesses over larger rivals, while 58% plan to spend more time at their local highstreet.
The investment world looks set to match this optimism, with national research from IW Capital revealing 16% of UK investors plan to back businesses in the hospitality sector in 2021. With hospitality hubs such as London’s West End reporting a return to 60% of pre-pandemic footfall, with commuters and tourists still to return, many are optimistic that sectors that struggled most during the pandemic still have significant growth ahead.
Luke Davis, CEO of IW Capital and founder of Rockwater Hove the current challenges facing hospitality and why better times are on the horizon:
“The past 18 months has provided a myriad of challenges for hospitality businesses, and staff shortages are the latest to appear. In the past few weeks shortages in chefs and other essential workers have led many to temporarily close which given the struggles many have faced, comes as a further shock. There is, however, good news on the horizon as staff return to work and the ‘pingdemic’ eases, which will, in my view, lead to a significant period of growth for the industry.
“Understanding how and why consumers’ demands have changed as a result of the pandemic will be essential to the recovery of the sector at large. Every business within the industry will need to reimagine the customer experience and reconsider their operational structures to regain the confidence and trust of the consumer.
“Not only have behavioural trends changed, but investor awareness too. This is good news for founders in the sector and, as our research shows, many investors are looking to back the recovery of hospitality. This comes both from a desire to do well with their money as well as doing good – whether that be for a local community or the environment.
“As the founder of Rockwater Hove in Brighton, I’m personally implicated in these evolving trends and understand how difficult it has been to navigate what has been a very fluid set of conditions. But it is crucial that we, as business leaders in these industries, now step up and ready ourselves for this hugely-anticipated recovery, shape our strategies to reflect the latest consumer data, and start building an intimate understanding from the ground up of this new ecosystem we find ourselves in.”
