Industry confidence falls, with nearly half of businesses expecting to miss profit targets

12 October 2012 by
Industry confidence falls, with nearly half of businesses expecting to miss profit targets

Confidence in the hospitality industry has dipped, with almost half of businesses saying they would not hit their profit targets, according to the quarterly Hospitality & Leisure Report from accountants RSM Tenon.

Overall, the number of businesses confident about achieving their revenue targets during the third quarter fell from 60% to 47%, as weak consumer demand and rising economic uncertainty topped their list of worries.

Ufi Ibrahim, chief executive of the British Hospitality Association, says in the report: "The recession is still with us, and the consequences aren't going to go away any time soon."

In many cases the Olympics and Queen's Diamond Jubilee celebrations were a mixed blessing for the sector.

George Theocharou, financial director of Myhotels, which operates boutique hotels in London and Brighton, said that while the games didn't deliver overall, the business still achieved good results.

"We were forecasting disaster, but a contingency plan pulled it all together and it proved to be a successful period," he explained.

The wet weather during the summer had a negative impact on some businesses, while others benefited. The Orchard Group of pubs, for instance, announced a boost in sales.

RSM Tenon, together with Longitude Research, surveyed 101 hospitality and leisure businesses during July and August for the report. The majority (64%) of companies questioned have an annual turnover of up to £10m.

Hospitality and leisure businesses are feeling confident, despite return to recession >>

RSM Tenon starts VAT health checks after HMRC crackdown >>

By Janet Harmer

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