EP Business in Hospitality Issue 49 - April 2014

UK Hospitality
Confidence
The UK Hospitality Confidence Monitor
is a quarterly survey for businesses to
report their experience of the market
and their outlook for the future. The survey
reports results on a scale of one to five,
with five being the most positive.
Commentary
This survey continues to show the
optimistic trend that has been evident
since the spring of 2013. The first quarter
is always a difficult one to compare with
previous trading as it follows the busy
Christmas period. However, there was
no doubting that it was an improvement
on Q1 2013, with respondents giving it
a high score of 3.9 out of five.
Like-for-like turnover remained at 3.9,
and gross margins remained at 3.4,
with spend per customer at 3.3. However
cost pressures have yet to ease, with
the ability to pass on cost increases
easily the lowest response in the
survey, at 2.0.
General business optimism remains
high, with respondents generally more
optimistic than three months ago, scoring
3.7 on average, and respondents were
generally looking to expand their business,
with a 3.8 result.
Are you seeing clear signs of the
long-promised recovery?
The general mood of the respondents was
one of cautious optimism, while expressing
concerns about the sustainability of
the recovery. The difference between
the perceived recovery in London and
elsewhere in the UK was noted:
“London’s recovery is dangerously close
to becoming a ‘boom’ and we all know
what inevitably follows that. Regionally,
it is a painfully slow recovery.”
“Do we really think there is a recovery?
Without being doom and gloom, we
haven’t seen it in the suburbs yet.”
Some respondents wanted to see further
evidence that growth was here to stay after
the events following the financial crash:
“Always cautious after the debacle
leading to the autumn ’08 fiasco.”
“Still cautious, it is hard to come
out of that mindset after five years of
tougher times, although all the indicators
are positive.”
“Cautiously optimistic, but sales are not
yet fully recovered to pre-2008 … and costs
are significantly higher than at that time.”
The emphasis on costs was echoed
by others:
“Need to ensure that costs are
controlled, particularly payroll, as demand
for employees increases.”
“London’s recovery
is dangerously
close to becoming
a ‘boom’ and we
all know what
inevitably follows
that. Regionally,
it is a painfully
slow recovery”
Another respondent was concerned that
everything depended on key customers
committing themselves:
“The business depends on a few key
decisions by clients.”
Should the government be doing more
to address the continued squeeze on
living standards (e.g. the recent 10%
increase in energy bills), or should it
leave well alone?
Respondents were split between the
government getting involved on various
issues and those that felt that the market
mechanisms should be left well alone.
Some of the more well-supported ideas for
government initiatives included reducing
taxes, increasing the minimum wage and
dealing with the energy companies:
“I support the Lib Dems in their desire
to increase the personal allowance for
taxation and that this should be taken
beyond £10,000 p.a. I also support the
notion that an above inflation increase
in the minimum wage is affordable by the
country and should be promoted. Apart
from possibly additional support for the
elderly, I would otherwise, generally, leave
well alone.”
“They should be regulating the energy
industry in a much firmer way. Import
electricity from Iceland and other northern
countries rather than subsidise the energy
companies.”
“It should address living standards by
driving efficiencies in the public service
and pass on savings through lower taxes.”
“Government needs to be concerned
and bring clarity to the debate and
transparency to the underlying financial
numbers, but should not interfere with the
market mechanism.”
6 | April 14 | EP