Operators optimistic about sector's long-term future – but urgent support needed for survival

25 February 2021 by
Operators optimistic about sector's long-term future – but urgent support needed for survival

Hospitality leaders are optimistic about the long-term future of the sector and its role in the UK's economic recovery, but urgent support is needed to sustain businesses through to reopening.

This is according to the CGA Business Leaders' Survey 2021, sponsored by Fourth and in collaboration with UKHospitality, the British Beer & Pub Association (BBPA) and the British Institute of Innkeeping (BII).

The survey found that one in 10 leaders predict their businesses will not survive if no additional support is announced in the chancellor's Budget next week. Only just over a third (37%) thought their businesses can return to profit this year without fresh support.

But there were also signs of confidence about prospects from mid-April, when a limited restart of hospitality is due to begin. Half (51%) of business leaders surveyed by CGA were confident about prospects for the sector over the next 12 months – more than triple the number who felt the same way in November (14%). The number feeling confident about their own businesses doubled from 27% to 54%.

There was evidence that many businesses will be seeking to grow rather than shrink their portfolios. Three in five (59%) leaders anticipated opening new sites in 2021 – a notable increase of 11 percentage points since November, and much higher than the number of leaders (31%) who anticipated keeping some sites shut for good.

Phil Tate, group chief executive at CGA, said: "This survey shows business leaders will be walking a tightrope in 2021. Nearly 12 months on from hospitality's first compulsory closure, many thousands of venues and jobs have now been lost for good. But it's also encouraging to see that many businesses are optimistic about long-term prospects and confident enough to be thinking about opening rather than closing sites. It's clear that a year of significant churn lies ahead and, as in all periods of crisis, there will be winners as well as losers."

But leaders stressed the need for more government support between now and reopening, identifying extensions to a trio of measures – the business rates holiday, VAT reductions and the furlough scheme – as their three top priorities. The survey also showed widespread calls for VAT cuts to be applied to alcoholic drinks and for business grants to be increased.

Photo: Shutterstock

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