As lockdown restrictions continue to ease across the UK, hospitality and leisure SMEs are feeling optimistic about future trading, with businesses anticipating a 21% revenue rise in Q2 compared to Q1.
The research from Barclaycard, which polled over 670 senior staff working in UK SMEs, found that a quarter of hospitality and leisure SMEs are bracing for high demand over the coming months.
Barclaycard payment data showed that pubs, restaurants and bar made a good start, processing 105% more payments in the last week of April compared to the first, before restrictions were lifted on April 12.
The research also found that looking ahead to revenues a year from now, the hospitality and leisure sectors are expecting a 42% boost as consumer confidence returns fully.
85 per cent of SMEs plan to invest in their businesses over the next 12 months, mainly by recruiting staff, investing in new equipment or technology, and upping marketing efforts. Forty-seven per cent of SMEs also expect to increase their staff over the next year.
Over a quarter (29 per cent) of hospitality and leisure SMEs expect to see higher demand between now and 21st June, when most restrictions are expected to be lifted, compared to pre-covid.
This is due to customers being less likely to go abroad (79 per cent), pent up demand after months of lockdown (66 per cent), and visits to hospitality venues to meet up with family and friends (65 per cent).
Hospitality and leisure venues taking reservations are currently booked at half (49 per cent) of their capacity, with more than a third (35 per cent) expecting customers will need to book at least five days in advance to secure a reservation for mid-June.
Despite signs of optimism, potential challenges remain for the coming months.
Of those who expect lower demand between now and 21st June compared to pre-Covid, many (37 per cent) expect, after an initial burst, customers will hold back their spending until June 21. Others are concerned that people now prefer to socialise and eat at home (33 per cent) or will tire of social distancing measures (34 per cent).
However, hospitality and leisure SMEs are prepared for customers once they fully open back up, and have invested in free hand sanitiser (65 per cent), signs to remind customers about social distancing rules (61 per cent), PPE for all their staff (53 per cent) and training new staff or those returning from furlough (38 per cent) ahead of May re-openings when most indoor restrictions lift.
Hospitality and leisure SMEs are also looking at ways to increase revenues after a difficult year including increasing prices (21 per cent) and investing in improving outdoor spaces (16 per cent).
Rob Cameron, CEO of Barclaycard Payments, said: “As restrictions lift, it’s reassuring to see the highest level of SME optimism since the SME Barometer launched, with expectations of a long overdue boost for the hospitality and leisure sector. With the confidence to plan ahead, small businesses have turned their attention to bulking up their workforce, as well as investing in technology and marketing. We’re looking forward to seeing this confidence translate into sales, and we continue to support small businesses as they further increase their stronghold in the UK economy.”