Hospitality revenue could rise by £36bn despite challenges, says Barclays

The UK hospitality and leisure sector could see a potential revenue rise of £36bn this year against pre-pandemic levels despite facing new challenges, which include soaring costs and a tight labour market, according to new research from Barclays.

More than nine out of 10 UK hospitality businesses were said to be interviewed last summer as part of Barclays’ ‘leisure rediscovered’ report, which revealed that 77% of respondents are confident of market growth this year, while the remaining 33% are very confident. 

Barclays now estimates that the industry could potentially gain £36bn during 2022 compared with pre-pandemic revenue, and £54bn more than in 2021. Achieving this prize will reportedly depend on how external pressures develop and on the industry’s own continuing efforts to attract customers, and to “delight them and to keep them coming back”.

The report found that sourcing and retaining the “right staff” remains “one of the biggest obstacles to this prize”. For example, it found that one in five businesses is finding it hard to place cleaning staff; 26% of hotels are struggling to recruit front-of-house personnel; and 42% of gyms cannot find fitness instructors.

Nonetheless, the report found that most leisure and hospitality sectors have “regained the ground lost” in the pandemic, with average profit margins now at 41% compared with 39% pre-covid.

Mike Saul, head of hospitality and leisure at Barclays, said: “It would be naïve to play down the existential nature of the cluster of threats facing the hospitality industry this year, but businesses that survived Covid-19 have already demonstrated their resilience. 

“With imaginative solutions to staffing pressures and by fine-tuning their responses to customer preferences, the UK sector is well placed to ride out the challenges posed by the second half of 2022.”