Hospitality and leisure sectors are suffering due to price hikes
ALL AREAS of business and leisure seem to be suffering in the current price hike crisis, as the cost of living continues to rise.
The hospitality and leisure sector’s post-pandemic recovery could be severely hampered by the cost-ofliving crisis and a widespread lack of staff, a new report has warned.
UK Hospitality’s Next Challenge – a study from Barclays Corporate Banking, shows that the release of pent-up consumer demand for socialising, holidays and experiences following the pandemic has given a boost to the sector.
More than three quarters (77 per cent) of H&L operators are confident of growth this year, and had predicted an average 30.5 per cent uplift in revenue compared with pre-pandemic levels. This equates to a £36 billion rise in annual turnover over 2019 and £54 billion increase on 2021.
However, the predicted growth could be stifled by soaring supplier costs and a scramble for talent.
Hospitality and leisure businesses report that their transport costs have already spiked by more than 38 per cent year-on-year on average, and their utility bills by 37 per cent.
Meanwhile, more than nine in ten (94 per cent) hospitality and leisure businesses are struggling to recruit personnel, with vacancies for cleaning staff (20 per cent), front of house staff (18 per cent), and delivery staff (16 per cent) causing the most issues.
There are particularly acute shortages of cleaners in the East Midlands and the East of England (28 per cent).
Almost a fifth (16 per cent) of bars and restaurants are finding it difficult to hire waiting staff, and over two fifths of gyms and leisure centres (42 per cent) cannot find fitness instructors.
In response, H&L operators are establishing new incentives to recruit and retain talent. Permanent flexible working arrangements (23 per cent) are the most popular measure, followed by an increase in staff welfare budgets and the introduction of bonuses (both 22 per cent).
Almost one in five employers (19 per cent) have also increased wages given to staff. Senior managers are set to receive the biggest boost to their pay packets, with an average increase of 7.7 per cent.
Delivery riders and drivers will receive an average increase of 7.5 per cent, followed by housekeeping staff (7.4 per cent, bar staff (7.3 per cent and finance staff (7.3 per cent).
Barclays’ report also shows that, for the time being at least, the industry’s finances allow for pay rises and other investments.
Barclays Corporate Banking Head of Hospitality and Leisure Mike Saul said: “The hospitality and leisure industry was undoubtedly one of the hardest hit by prolonged periods of lockdown during the pandemic. In the early part of 2022 however, in a society free from restrictions, the sector enjoyed strong sales, leaving many confident about their growth prospects.
“The worsening cost-of-living crisis is now a serious threat to that growth, with the latest Barclaycard Consumer Spending Index showing that restaurants, bars, pubs and clubs have all seen a slight decline in May 2022, compared to the month before.”
1in5 employers (19 per cent) have increased wages given to hospitality staff including senior managers (photo: Adobe)
42% of gyms and leisure centres cannot find fitness instructors.
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16% of bars and restaurants are finding it difficult to hire waiting staff (photo: Adobe)