In its report called 'Leisure Rediscovered', Barclays’ data showed 94% of hospitality and leisure companies are confident about their growth prospects for the rest of 2021 following a surge in trade.
Projected sales figures for the period between April and December 2021, when the hospitality sector has largely been open again, showed an additional £3.5bn in gross value added (GVA) in sales versus the equivalent period in 2019.
Its research revealed new patterns in the way people are accessing hospitality and leisure services, and changing consumer habits. For example, although restrictions on foreign travel have eased substantially in the past couple of weeks, staycation tourism looks likely to remain for the foreseeable future with almost half (45%) of consumers prioritising UK holidays over those abroad, with the most popular destinations being the Lake District, south-west England and the Scottish Highlands.
Staycations could add £9.2bn to market
Barclays Corporate Banking estimates that, if a preference for UK holidays continues at the same rate in 2022, it will add up to £9.2bn to the domestic tourism market.
The report also showed health is key to survey respondents. Analysis showed, on average, consumers are prepared to pay 19.9% extra for healthier food and drink options, and 17.8% for holiday accommodation that includes health and wellbeing services such as a gym or spa. More than nine in 10 (91%) of hospitality and leisure operators are now prioritising ‘healthy’ products among their portfolios.
While eating out or drinking, those aged 16 to 24 would be prepared to pay a premium of 35%, on average, for products with strong sustainability credentials. The average premium for 25 to 35-year-olds is 30%. Meanwhile, a sustainable holiday experience is worth 39% more to the youngest group, and 32% for those aged between 25 and 35.
Services that are safe and hygienic are proving to be most popular. Barclays stated customers would pay an extra 20%, on average, to eat and drink in venues with particularly strong standards. The 16 to 24 age group would pay an average of 39% extra, while those aged 25 to 35 would pay 33% more.
Confidence has returned
“After a very difficult period for the hospitality sector, it is great to see how well the sector has bounced back. Our findings show an industry brimming with confidence and buoyed by surging revenues,” said Barclays Corporate Banking head of hospitality and leisure Mike Saul.
“However, it is also an industry that is undergoing a substantial amount of change – from the customers it serves to the products it sells. We have uncovered strong evidence that, particularly for younger customers, operators will need to place increased focus on healthy, sustainable and safe product ranges and to maintain investment in data and technology.
“While the industry is navigating some short-term challenges around supply chains and labour shortages, operators that prioritise these areas will be an incredibly strong position for the long term.”
Other findings from the Leisure Rediscovered report show technology is a strong aspect of the sector’s proposition with 36% of businesses earning more from e-commerce than ever; 88% of operators now joining forces with their local peers to share data and offer joint deals; 42% of spas are seeing more men come through their doors and more younger customers are using holiday lets (47%) and holiday parks (40%); and local hospitality is strong as 41% of consumers say they are now more drawn to go out for entertainment in their local neighbourhoods than further afield.
