The hospitality sector in the UK is showing signs of recovery after facing numerous challenges over the past few years. According to the latest Hospitality Market Monitor from CGA compiled by NIQ and AlixPartners, the total number of licensed pubs, bars, restaurants, clubs, and hotels in the UK has increased quarter on quarter for the first time in two years. In June, there were 99,207 licensed premises, up by 462 or 0.5% since March. While this may seem like a modest increase, it marks a significant turnaround for an industry that has been struggling with closures and setbacks since the onset of the COVID-19 pandemic.
### Rising Confidence in the Sector
The rise in the number of licensed premises is a positive sign of confidence among business leaders and investors in the hospitality sector. Karl Chessell, CGA by NIQ’s director of hospitality operators and food, EMEA, noted that while it is too early to determine if the downward trend in outlets has bottomed out, the solid sales growth in the first half of 2024 indicates a brighter outlook for the sector. Despite ongoing cost pressures and tight discretionary spending among consumers, the hospitality industry is on a more stable path towards recovery.
### Challenges Faced by the Industry
The hospitality sector has faced a series of challenges over the past few years, starting with the COVID-19 lockdowns that led to the closure of thousands of premises. The rise of hybrid working has also impacted city centers, particularly in London, where the number of diners and drinkers remains below pre-pandemic levels. Additionally, factors such as train strikes, bad weather, and rising costs, particularly in energy, labor, and food bills, have further strained the industry.
### Slow Recovery of the Casual Dining Sector
One of the hardest-hit sub-sectors within the hospitality industry has been casual dining, with site numbers down by almost a quarter and a closure rate of over one per day. However, there has been a slight improvement in the past year, with a 1.7% increase in site numbers. On average, three net new sites are opening each week in 2024, signaling a slow but steady recovery for the casual dining sector.
### Growth in Themed Bars and Decline in Nightclubs
Themed bars, including competitive socializing venues, have seen a significant growth of 29% over the past year. This increase highlights a shift in consumer preferences towards more experiential and interactive dining and entertainment options. On the other hand, nightclubs have experienced a decline of 10%, reflecting changing trends in nightlife culture.
### Long Road to Recovery
While the recent increase in licensed premises is a positive development for the hospitality sector, it is important to note that the industry is still significantly smaller than it was before the pandemic. Total site numbers remain 13.8% below the pre-COVID levels of March 2020. Despite the challenges that lie ahead, the sector is moving in the right direction, with businesses and investors showing renewed confidence in its future.
### Conclusion
The revival of Britain’s hospitality sector is a promising sign of recovery after years of setbacks and closures. The increase in licensed premises, particularly in the casual dining sector, reflects a growing confidence among business leaders and investors. While challenges still exist, such as rising costs and changing consumer behaviors, the industry is on a more stable path towards recovery. As themed bars continue to grow and nightclubs face decline, the hospitality sector must adapt to changing trends and consumer preferences to thrive in a post-pandemic world.