Hospitality spending rebounds strongly despite Brexit

08 August 2016 by
Hospitality spending rebounds strongly despite Brexit

Consumer spending on hotels, restaurants and bars bounced back in July despite some signs of weakening consumer confidence overall.

That's one of the findings from Visa's UK Consumer Spending Index for last month, which reflects overall consumer spending, not just spending on cards.

Spending in hotels, restaurants and bars was up by 8.9% year-on-year in July, the first full month since the UK's vote to leave the European Union, making it the strongest performing sector, according to Visa.

That was a significant rise on June's figure of +3.4% year-on-year and considerably stronger than the increase in overall consumer spending, which was up 1.6% year-on-year in July.

Overall spending was up 0.8% in May, and rose 0.9% in June. However the 1.6% seen in July is still lower than the average growth rate in the past two years, of +2.4%.

Kevin Jenkins, UK & Ireland managing director at Visa said: "July's data suggests that UK consumer spending is holding up despite the ongoing uncertainty following the referendum, albeit at lower levels of growth than we've seen in the last couple of years. Looking at the last three months, the Index indicates that consumers remain cautious with their spending. Overall growth is hovering nearly one percentage point below the average seen over the past two years.

"Looking at the sectors, the longer term trend we've seen for increased spending on leisure and recreation is enduring. And the high street saw its strongest annual growth rate in five months with clothing retailers in particular bouncing back after a fall in June."

Josh Beer, of the Illustrious Pub Company, Cambridgeshire said: "Overall, this was a good month for us with revenue up 6.2% compared to last month. A lot of this was due to the performance of our outdoor catering business, as we were called in to provide food for BBQs, weddings and corporate summer parties.

"Sales at our pubs also benefited from the Euros and July's heatwave. In our site where a large screen TV had been installed sales surged, and among our locations, those that allowed customers to dine al fresco were the best performers."

Meanwhile, business confidence has fallen by less than expected after Britain's vote to leave the European Union, according to accountancy firm BDO.

Its figures for July found minor falls in optimism, based on growth prospects six months out, and in output, measuring "companies' experience of orders for the three months ahead".

BDO said that the "initial impact of the Brexit vote has been less severe than expected".

Spending growth in hotels, bars and restaurants slows in June >>

Consumer spending slows but hospitality continues to perform well >>

Regional hotels cash in on boom in Far Eastern visitors >>

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