Up and down and up again

Is there or isn't there, that is the question - is there a recession or isn't there? It's a tricky question, and the answer will depend on who you talk to and what they want you to hear, but the collapse of the Fish! restaurant chain last week might suggest that trading conditions remain difficult. Or is this a one-off? Should the rest of us be worried?

That there has been a recession, there is no doubt. Operators were slow to admit it at first, and there has been a succession of distracting economic smokescreens for poorly performing companies to hide behind - foot-and-mouth and Ground Zero the most obvious.

These catastrophic events may be blamed for last year's downturn in trading, but the more astute analysts will say that the US economy was slowing down before Armageddon, and it was only a matter of time before all of Europe followed suit.

What happened in rural Britain last spring and in New York in the autumn simply accelerated the inevitable. Remember how quick some companies were to lay off staff on 12 September (or thereabouts), as if the plans to cut were already drawn up and ready to roll?

But that is now history; so, back to the original question - are we still in recession?

Looking at the current economic situation, it would be easy to feel depressed and, thus, in depression. The recent collapse of Fish! (page 12) and poor results from the likes of Groupe Chez Gérard suggest consumers remain reluctant to spend money in the way that they did 18 months ago.

And some London hoteliers will say, usually off the record, that their US guests have not returned in their previous numbers, and June, despite the Queen's Golden Jubilee celebrations, was tougher than expected. The stock market is having a torrid time at the moment as well, falling to a New Labour low last week.

There is, however, a growing suggestion that the economy, and particularly the hospitality industry, should be over the worst. In April, a survey of hotels and restaurants in the UK by recruitment company Manpower suggested that 31% of hospitality employers were planning to recruit staff over the following three months. In the latest Manpower poll, out last week, the figure had risen to 45% - nearly half of the UK's hospitality businesses will be recruiting staff between now and September.

At the same time, the Office for National Statistics has revealed that the number of overseas visitors entering the UK has finally risen above the corresponding figures for the same period last year. Not only that, but Ernst & Young and the English Tourism Council have just announced that six out of 10 leisure operators in the UK have seen a return to "normal business".

And here lies a clue to the answer to the opening question. "Normal business" will always include failures as well as successes; there will always be companies that get it wrong, operators who overestimate the market or deliver a flawed product.

Don't focus on these, or on those companies that are still hiding behind the events of last year. The economy may be static, and it may not be about to roar off in a boom, but it's no longer in decline, either.

The signs of recovery have begun to show.

FORBES MUTCH
Editor
Caterer & Hotelkeeper