The impact on the hospitality market in more recent years has been well reported and for an industry that is a vital resource across the Southwest and a consistent top 3 destination within the UK there is a constant need for operators to keep a close eye on changes.
Where now for the Leisure Sector?
Whilst the impact from the pandemic led to more operational challenges, finding customers was not the issue. As we start to move away from those frenetic years new challenges are front and centre for owners – those being raising costs, staff retention and customer footfall.
So what happens next? What has been most notable from our prospective is the positivity in the sector with business owners in the region trading far better than the National media would have us believe. Customers are still booking for holidays and short breaks, albeit with less of a lead in time for the accommodation providers, but broadly similar to pre pandemic levels. For the food and drink operators we are seeing the higher spend venues seeming to be trading better than the mid market operators – the trend being that whilst customers may be going out less, when they do they tend to want more of a treat and happier to spend more, just less often.
When it comes to the appetite for selling and buying we are seeing more established venues coming to the market and whilst the low stock levels in hotel and holiday park sectors are keeping pricing strong, that is less the case for the pubs and restaurants with caution still being shown by buyers (and this despite the more positive operationally experience on the ground) who remain concerned about the pressures of rising costs.
In summary, our expectation for the year ahead is that trade will remain strong across the sectors and whilst there is always fall out, most businesses have made it through the winter better than predicted and will enjoy a good Summer season. The rise in alternative accommodation may well recede as demand is lower and the established hotels and holiday parks will benefit from this no doubt. The impact of higher food prices and establishment costs has resulted in simplified menus and reduced trading hours, but expect this to increase in the busy months and retract again later in the year. The key longer-term concern is that of staffing and as stands there seems no clear way of dealing with this – there is simple not enough staff to cover the demand and whilst efforts are underway to encourage the next generation, it will still take a few years to see the impact of this. So to finish – how perverse that an industry under pressure from higher costs is actually going to suffer more from not being able to staff up to a level to support the customer demand.
To talk to us about your commercial property, please contact our agency team.
