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Long-term steady growth predicted for hospitality operators

15 April 2008 by
Long-term steady growth predicted for hospitality operators

Hospitality operators faced tough market conditions in 2007 but overall the sector continued to grow, according to a new report.

The study by market analysts Key Note, based on a survey of 1,000 consumers and analysis of official statistics, showed drop in the number of people eating out in pubs and restaurants in 2007.

Authors suggested the smoking ban and fears about the credit crunch and increased mortgage bills contributed towards this trend.

However, the report also suggested that compared with 2006 the overall market grew by 4.3% to £32.4b.

The pub market was the fastest-growing sector, according to the report, jumping 12% year-on-year, despite the volume of beer sold in 2007 dropping to its lowest level since the 1930s.

Key Note managing director James Donovan predicted further steady growth for the UK market over the period from 2008 to 2012.

"However, in the short term, the possibility of lower consumer spending could affect sales in some sectors," he warned.

Michael Burn, general manager at the Swan at Lavenham, argued that constant negative talk will affect the market.

"If we continue to talk up a downturn we are sure to have a downturn. We need to be more positive, as the market on the whole is strong," he said.

Iain Shelton, managing director of the Devonshire Arms Country House Hotel and Spa, said building on existing customer relations will help operators cope with any downturn.

"We must continue to adequately look after our existing clients to build on a trust that means that when they want to treat themselves they automatically go to their favourite rather than a competitor that perhaps may not be as good," he said.

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By Kerstin Kühn

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