Hospitality businesses remain optimistic about their prospects over the next 12 months despite rising energy bills and a weakening economy, according to a new report from American Express Europe.
Its survey of 250 hotels and restaurants across the UK, France, Germany, Italy and Spain found an overall 65% anticipated improved or stable profits over the next year.
This expectation rose to 71% in the UK, which was most positive about its profitability.
More than a third (39%) of companies forecast a rise in profits, although hotels (at 50%) were more bullish than restaurants, where just 29% envisaged a rise.
Katherine Pretzel-Shiels, head of hotels and restaurants at American Express, said the industry was buoyed by the rising interest in celebrity chefs and the increased accessibility of travelling and eating out.
Competition was seen as the key challenge for 30% of respondents, while 17% cited the need to keep up with changing consumer tastes.
Although hotels review their prices at least once a year and restaurants at least twice a year, they now view brand image as their key weapon in the battle for customers.
For hotels, offering a premium experience, innovation and style are the most important brand attributes. Restaurants are focused on innovation, style and family appeal.
Although 86% of businesses actively research customer preferences, most seem to have undervalued the rise of the ethical buyer.
One in three consumers claim to base their buying decisions on social, ethical and environmental issues, but ethics were near the bottom of the list of key brand attributes listed by hospitality businesses.
"Ethical shopping in the UK is worth £25b a year and ‘conscience consumers' could be an area of untapped potential for hotels and restaurants," said Pretzel-Shiels.
by Angela Frewin