Half of hospitality operators still looking to expand in the next three years, research suggests

Hospitality and leisure businesses are continuing to expand and invest in experience-led offerings despite rising costs and geopolitical uncertainty, recent research has shown.

According to Barclays’ new Hospitality & Leisure (H&L) report, 65% of operators have strengthened spending on experiences in response to rising consumer demand for activity-led outlets such as golf courses and botanical gardens, which reported a 2.5% and 6.1% increase in cash flow rises in the last quarter.

Half (51%) of H&L operators also planned to expand in the next three years.

Another 60% of those surveyed were optimistic about the summer’s sporting, cultural and entertainment events, ranging from the World Cup to the Harry Styles concert, the latter of which is expected to attract average spend per night of £981, according to Barclays data.

That said, 72% of consumers expected tensions in the Middle East to impact the cost of living throughout 2026, while 57% expressed concern the cost of experiences and events will climb this summer as a result.

From an owner perspective, the survey showed that 57% of H&L leaders have changed their business outlook for 2026 in light of current geopolitical instability, and 31% are feeling pressure to raise prices amid the increases to National Living Wage and National Insurance Contributions.

While SMEs are taking a more cautious approach, with borrowing down 12.7% and savings increasing 1.9% year-on-year in Q1, larger firms have increased borrowing by 3.2% and reduced savings by 8.7%.

However, across all H&L businesses, 88% of respondents said they were confident in their prospects over the next year, in comparison to 83% of businesses across all sectors.

Rich Robinson, head of hospitality and leisure at Barclays, said: “There is pressure in the sector, but our data is telling a story of resilience, adaptability and confidence to invest. We’re five months into the year and our lending book is up 13% on last year, so it’s a big sign that clients want to invest.

“While consumers remain selective with their spending, the appetite for memorable, high-quality experiences is clearly holding up. That presents a strong opportunity for businesses that can combine value, personalisation and operational efficiency to stand out and grow.”

The report collated anonymised Barclays’ client data from 73,000 UK H&L businesses, combined with Business Prosperity research from 500 industry leaders and 2,000 consumers.