Smaller independent venues to drive growth in the hospitality sector
Just over one month on from the easing of the majority of Coronavirus restrictions, signs of economic recovery are all around, with growth reaching 4.8% in Q2 – before the remaining restrictions were lifted.
There are, however, challenges remaining for some sectors of the economy. The past 18 months has provided a myriad of challenges for hospitality businesses, and staff shortages are the latest to appear. In the past few weeks, shortages in chefs and other essential workers have led many to temporarily close which given the struggles many have faced, comes as a further shock.
On the other hand, good news is on the horizon as staff return to work and the ‘pingdemic’ eases, which will lead to a significant period of growth for the industry. As founders of hospitality and leisure businesses navigate their recoveries amidst a newly-changed landscape, shifts in consumer spending and behaviours are offering a light at the end of the tunnel.
Research that we have commissioned at IW Capital reveals that over 63% of consumers are going to support independents and small businesses over larger rivals, while 58% plan to spend more time at their local highstreet. The investment world looks set to match this optimism, with 16% of UK investors planning to back businesses in the hospitality sector in 2021. Moreover, with hospitality hubs such as London’s West End reporting a return to 60% of pre-pandemic footfall, and commuters and tourists still to return, many are optimistic that the sectors that struggled most during the pandemic still have significant growth ahead.
Understanding how and why consumers’ demands have changed as a result of the pandemic will be essential to the recovery of the sector at large. Every business within the industry will need to reimagine the customer experience and reconsider their operational structures to regain the confidence and trust of the consumer.
Not only have behavioural trends changed, but investor awareness too. This is good news for founders in the sector and, as our research shows, many investors are looking to back the recovery of hospitality. This comes both from a desire to do well with their money as well as doing good – whether that be for a local community or the environment.
To find out more about IW Capital, or for more information on investment and non-executive opportunities, please speak to a member of the IW Capital team today on 020 7015 2250, or email firstname.lastname@example.org