Majority of pubs fear the worst for next year

Only 20% of pubs feel confident about their economic prospects over the next year, according to research by American Express.

The third annual American Express Hospitality Monitor reveals that hospitality businesses are bucking the trend of passing overheads, such as fuel rises, on to customers with 56% prepared to absorb increases.

Prices remained fairly static with restaurants reporting an increase of 2% and the overall number of businesses increasing prices (47%) down on last year (49%).

Reducing the cost of goods and services is the second priority for the majority of businesses behind increasing the customer base.

A total of 40% intend to work harder to soften the impact of the economic downturn.

"The economy is forcing the agenda to a certain extent but the industry is fighting back," said American Express head of hotels and restaurants Kathryn Pretzel-Shiels.

"There are still opportunities to make money by providing a quality product and memorable service, as consumers are still willing to dine out and are doing it more than ever before."

Green credentials​

Direct competition (34%) remains the number one priority for businesses with many looking to set themselves apart through environmental initiatives such as ethically sourced products.

Almost half (42%) of consumers said green credentials now played a role in their purchase choices.

"There has been a maturity of the role environmental initiatives have within the hospitality industry," said Pretzel-Shiels.

"Many respondents recognise that increased brand value can be achieved through association with an environmental policy.

"This has been evidenced in the establishment of procurement policies that source both environmentally friendly and locally supplied products, over more tactical practices such as energy efficient lighting and recycling."