Hospitality & Leisure bosses look to 'Winter of Content' after uncertain summer

Hospitality and Leisure bosses look to 'Winter of Content' after uncertain summer

27 August 2020
  • Just 6% of hospitality and leisure sector leaders are confident about growth this Summer, according to new research from Barclays Corporate Banking
  • Businesses are predicting 41% year-on-year decline in sales, with two fifths (39%) saying they’ve been ‘kept afloat’ by VAT cut to 5%
  • Confidence rockets to 83% in Winter 2020/21
  • Industry leaders are innovating to open up new revenue streams and prepare for the long-term      

As hospitality and leisure businesses prepare for the August Bank Holiday, research from Barclays Corporate Banking reveals just 6% of businesses in the sector are confident of growth across the Summer.

The significant challenges currently facing the industry are underscored in a new Barclays study1 of over 300 senior hospitality and leisure executives. On average, businesses predict their earnings will fall by 41% year-on-year when comparing 2020 to 2019, and nearly two fifths (39%) say they’ve been ‘kept afloat’ by the VAT cut to 5% - a figure that peaks at 55% for cafés. In addition, 40% of hospitality and leisure leaders say the VAT reduction has been a ‘lifeline’ for the sector.

And despite the ‘staycation summer’ providing a noticeable boost in earnings for over three quarters (76%) of the businesses surveyed, it’s not until the end of the year that confidence reaches substantial levels. Only three in ten businesses (30%) anticipate growth in the Autumn, but over four fifths (83%) think they’ll grow in Winter 2020/21.

To boost their prospects in the long-term, and to open up new revenue streams in the short-term, many hospitality and leisure companies have been investing in new technology since lockdown began. In fact, in Barclays Corporate Banking’s new white paper, Ready to go again: how the UK’s hospitality and leisure sector in adapting to the ‘new normal’, nearly a third (32%) of the research respondents said the coronavirus had accelerated a ‘technological revolution’ in the sector.

To illustrate this point, one in four retail businesses (25%) have embraced data analytics for the first time during lockdown, with gyms / leisure centres (38%), travel companies (33%) and holiday parks (33%) most likely to have taken this step. Harnessing the power of data is also an emerging trend in terms of collaboration between businesses, with 32% of those surveyed saying there will be an increase in data sharing among companies at a local level.

Mike Saul – Head of Hospitality and Leisure, Barclays Corporate Banking, said:

“The hospitality sector has been one of the hardest hit and the road ahead is tough. The government schemes, particularly the eat out to help out scheme, have given the industry a massive and much needed short term boost. Whilst many bosses in the industry have essentially written off this year it is pleasing to see they are feeling more confident in the run up to winter and into next year.

“Despite the headwinds and uncertainty, this is a highly resilient sector that hasn’t stood still. To fulfil their long-term growth ambitions, companies used the lockdown period as an opportunity to innovate, refresh their business models and adopt new technology. Hospitality and leisure are full of smart, inventive, resourceful leaders who will ensure the future is bright and the present is as good as it can possibly be.”

Many new customer apps have also been rolled out since the pandemic struck, with more than one in seven (17%) businesses introducing new smartphone offerings. Gyms / leisure centres (31%), restaurants (24%) and hotels (20%) are most likely to have done so.

More broadly, over a fifth (22%) of hospitality and leisure businesses have made upgrades to their websites to accommodate more digital sales, with restaurants (36%) most likely to have done so. These trends correlate with others such as 18% of restaurants offering home deliveries for the first time during lockdown, and 20% introducing new ‘click and collect’ functionality.

Kris Gumbrell – Chief Executive, Brewhouse and Kitchen, added:

“Lockdown might not have been a time to earn, but it was definitely a time to learn. It gave us the opportunity to try new things and futureproof the business. In just three months, we introduced new takeaway and home delivery services, created a new mobile website, upgraded our outdoor spaces and expanded into gifting with our own range of mini-kegs.”

However, it’s not just digital sales channels that are being invested in, with hospitality and leisure businesses also putting measures in place to help customers feel safe at physical premises. For example, nearly half of Barclays’ respondents (48%) said they’d implemented what’s known as ‘theatre cleaning’, where cleaning staff wear brightly coloured clothing to be more noticeable.

Kitchen areas have also been impacted. In 44% of cafés, 30% of restaurants and 25% of pubs, food preparation areas have been opened up to be more visible to customers, while 20% of bars and 19% of hotels said they’d moved to a ‘dark kitchen’ format where food is prepared off-site.

Another emerging development is for companies to review their rental agreements with landlords. From Barclays Corporate Banking’s study, over a quarter of sector leaders (26%) said they will be having conversations with landlords in the near future. Within these discussions:

  • 18% will ask to move to a turnover-based rent model
  • 16% will seek to extend payment terms for backdated rent
  • 15% will request a move away from upwards-only rent reviews
  • 13% will offer landlords shares in the business in exchange for rent
  • 10% will move towards a shared ownership scheme with landlords


1. Barclays Corporate Bank commissioned Censuswide to conduct a survey 300 senior managers (or above) from across the industry, among firms with between 10 and 500+ employees. It incorporated the views of leaders from hotels, cafes, restaurants, bars, pubs, golf clubs, travel agencies, gyms, holiday parks and theme parks. The research took place between the 17 July and 24 July, 2020.