Hospitality and leisure firms have expressed mixed feelings about their business prospects for the year ahead, according to the Outlook 2012 survey by accountancy firm Baker Tilly.
Around half (49%) said they were feeling positive, but an almost equal number (47%) were unsure about their future, while just 4% had a negative outlook.
These figures were supported with 90% of businesses expecting their profit levels to increase or stay the same.
Although the general outlook for leisure and hospitality businesses is broadly positive, almost half (45%) of business leaders predicted the recovery would be slow, with low growth; while slightly more (47%) predict economic stagnation. Less than a tenth (8%) think the economy will slip back into another recession.
Ali Aneizi of Baker Tilly commented: "As the results of the Outlook 2012 survey show, despite the UK economy teetering on the edge of a double-dip recession, there is confidence within the leisure and hospitality sector for the rest of the year."
When asked what single initiative from the Government would help improve business conditions, many respondents said a reduction in VAT, tax and red tape. Business leaders identified a downturn in overall demand and an increase in global inflation as potential threats for the coming year.
With a view to tackling the continuing economic downturn, half of businesses (49%) said that they were focusing on improving their processes and systems, with over two-fifths (43%) aiming to cut costs directly.
In addition to implementing measures to help strengthen their position, nearly half (47%) of businesses were looking to raise new capital to help them through the economic downturn and hopefully open up new revenue streams.
Aneizi added: "It seems that the general sentiment among hospitality and leisure firms is fairly positive and they are looking to innovation and improved service to help flourish through these uncertain times.
"Although there are some measures that the Government can take in helping businesses to continue the recovery, the basis of performance for the sector is going to be heavily driven by consumer confidence."
By Janie Manzoori-Stamford
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