EP Business in Hospitality Issue 48 - January 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.
Commentary
This survey continued to show the
optimistic trend first seen in the Q2
survey. The most upbeat responses
were in regard to increasing like-for-like
turnover (3.9 compared with Q3 3.7)
and looking to expand your business
(4.0, which is the same as Q3).
Gross margins continued to improve
(3.5 compared with Q3 3.3), as did spend
per customer (3.3 compared with Q3 3.1),
Supplementary
Questions
Are you seeing clear signs of the long
promised recovery?
Yes 83%
No 17%
In your experience, are banks more
willing to lend to businesses than a
year ago?
Yes 76%
No 24%
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?
Do more 69%
Leave alone 31%
which tentatively suggests that customers
are at last prepared to spend a little more
each visit.
This view is reinforced by cost pressures
easing slightly (3.2 compared with Q3
2.8). This survey question has usually
drawn the most negative responses and
so for even this to become mildly positive
is good news.
Are you seeing clear signs of the longpromised
recovery?
Eighty-three percent of respondents said
that they saw signs of the recovery, but
many were guarded in their optimism.
One wrote:
“Things feel better, but there are so
many unknowns that haven’t been sorted
out economically. One hopes it’s not a
mirage.” Another commented:
“Still early to believe that it is recovering.
The short-term forecasts for Q1 2014 are
still soft. Issues such as the shutdown in
the US have not helped long-term
confidence. This may just be a blip.”
And a couple of caveats were made on
this general optimism. One commented
that while the recovery was real it was
somewhat concentrated: “mainly in the
south and south east of England”, while
another noted that: “October hasn’t
performed well.”
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?
Sixty-nine percent of respondents did
think that the government should do
more to address living standards.
However, there was some nervousness
about politicians getting involved in
energy prices, other than to reduce
the burden of green taxes. One
respondent commented:
“We are a free market economy and
chose to privatise utilities two decades ago.”
And another agreed with the idea of
the government helping hard-pressed
consumers on energy prices, “but not
a price freeze”.
Several comments felt that the
burden of taxation, both energy
related and elsewhere, needed
to be reduced:
“Green energy taxes should not
be pursued any further. The nuclear
option provides us with energy security.
There’s growing concern also with the
transfer of costs to the private sector
through increased S106 contributions,
CIL and EMRO’s [Construction and
licensing taxes] among others.”
Another wrote succinctly: “Reduce
Taxes, Reduce Rates.”
In your experience, are banks more
willing to lend to businesses than a
year ago?
Seventy-six percent of respondents
agreed that bank finance was easier to
obtain, but there were dissenting voices,
including one respondent who wrote:
“You are joking surely.”
And finally one respondent talked
about the strength of the Central London
hotel market: “Demand in London
continues to be very buoyant. The
predictions of a post Olympic slump in
demand have proved to be incorrect and
the increase in supply in Central London
has not impacted on overall revpar.” •
8 | January 14 | EP