See the big picture
Inflationary pressures mean consumers will be prioritising value, quality and memorable experiences in their spending decisions.
Head of Hospitality and Leisure, Barclays Corporate Banking
Responding to ever-changing consumer behaviour will once again be the big issue for all Hospitality and Leisure (H&L) operators in 2024. With discretionary spending still impacted by inflationary pressures, we’ve seen the rise of the ‘insperience’, with consumers opting to stay home for takeaway meals, watching video on-demand on streaming services, or online gaming. When they do go out, consumers are focusing on quality and value for money, and on more memorable or different experiences.
An example of these changes is the impact on the pub sector. The number of licensed premises in the UK fell below 100,000 last year – a drop of more than 44,000 in the past 20 years1. I think we’re likely to see those that survive continuing to reinvent the pub experience through things like competitive socialising. Similarly, businesses in other H&L verticals will look to further enhance the customer experience to drive trade, whether through sensible capex, loyalty and seasonally based incentives or investment in digital technologies.
Skills shortages have been well publicised through-out 2023 - stretching back to the impact of Brexit, and I expect this to continue throughout 2024. For many operators, it’s not just a case of lack of numbers, it’s finding people with the right skills and experience – a situation which could hinder service levels at a time when under-pressure consumers are choosing to prioritise high-quality experiences and value for money.
To both attract and retain staff, employers may have to invest more in training as well as benefits not normally associated with the sector, such as healthcare or gym memberships. Recent research findings that show 41% of younger H&L staff want to see more equality1 in the workplace, suggests employers also need to demonstrate particular support for the social element of the ESG agenda. Of course, last year’s budget impacting on labour costs will impact profitability for the whole sector and drive more creativity despite labour usage.
Whether you run gastropubs or wet-led operations, to succeed it’s crucial to know your market – and it’s the same story whatever part of the sector your business operates.
Head of Hospitality & Leisure, Barclays Corporate Banking
Corporate activity has been subdued for some time now, Apollo’s takeover of The Restaurant Group, has set a benchmark for the casual dining sector which we see as a positive. Furthermore, the strong performance across Travel and resilience of the UK staycation market should drive positive sentiment for investors and management teams to transact. Additionally overseas money now seems to be more comfortable with UK consumer risk due to very recent economic trends.
1CGA Prestige Foodservice Price Index Annual Briefing 2023 – https://prestige-purchasing.com/wp-content/uploads/2023/12/The-FPI-Annual-Brieifng-2023-Slides.pdf?utm_source=Prestige+Purchasing+-+Mailing+List&utm_campaign=0155dad100-EMAIL_CAMPAIGN_2019_06_12_09_57_COPY_01&utm_medium=email&utm_term=0_9faeca62cd-0155da^
Operators will be looking to capitalise more than ever before on themed entertainment around national or local events, sporting occasions and bank holidays.
Businesses will need to innovate to differentiate in the battle for share of wallet in the growing ‘pub sports’ space.
Investing in the latest tech and data analytics capabilities will remain critical in understanding what customers are looking for and enhancing their experiences.
Keeping fraud front of mind
Fraudsters are as active as ever across the hospitality and leisure sector, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
To discuss your business requirements and how Barclays can support you, contact us today.
Behind every door is a different opportunity. Explore fresh perspectives and insights.
Find out how UK hospitality and leisure businesses are adapting to customer trends and cost challenges.
We provide a complete spectrum of solutions to enable your business to transact and trade easily, manage risks efficiently and finance its plans for growth.
Our comprehensive guide to protecting your business against fraud, scams and cybercrime.
