finance

Hospitality and leisure could contribute an extra £250m to Scottish economy this year



The hospitality and leisure industry could contribute £250m more to Scotland’s economy this year than in 2019, according to new research from Barclays Corporate Banking.

It found that the vast majority of hospitality and leisure businesses (93%) in Scotland are confident about their growth prospects for this year, following a post-lockdown surge in trade.

Based on projected sales figures for the period from April to December 2021, when the hospitality sector has largely been open again, this equates to £3.5bn more in national Gross Value Added (GVA) than in the equivalent period in 2019.

Surveys were carried out in late July and early August among 524 senior managers in hospitality and leisure businesses with 10 or more employees, and 2,008 adults across the UK.

The research reveals new patterns in the way people are accessing hospitality and leisure services and changing consumer habits.

For example, although restrictions on foreign travel have eased substantially in the past couple of weeks, staycation tourism could be here to stay, with more than half (52%) of consumers in Scotland prioritising UK holidays over those abroad.

The most popular destinations are the Lake District, the South West of England and the Scottish Highlands.

Barclays Corporate Banking estimates that, if a preference for UK holidays continues at the same rate in 2022, it will add up to £9.2bn to the UK’s domestic tourism market.

The report also shows that significant numbers of consumers are prioritising hospitality and leisure products that offer health and wellbeing benefits, strong sustainability credentials, or which come with particularly strong safety and hygiene standards.

On average, consumers in Scotland are prepared to pay 17.4% extra for healthier food and drink options, and 15.8% for holiday accommodation that includes health and wellbeing services – such as a gym or spa – and 80% of hospitality and leisure operators in the area are now prioritising ‘healthy’ products.

Perhaps unsurprisingly at this point, many consumers in Scotland are expressing strong preferences for services that are safe and hygienic.

In fact, customers would pay an extra 18.6%, on average, to eat and drink in venues with particularly strong standards. Across the UK, the 16 to 24 age group would pay an average of 39% extra, while those aged 25 to 35 would pay 33% more.

Mike Saul, head of hospitality and leisure at Barclays Corporate Banking, commented: “After a very difficult period for the hospitality sector, it is great to see how well the sector has bounced back.

“However, it is also an industry that is undergoing a substantial amount of change – from the customers it serves to the products it sells.

“While the industry is navigating some short-term challenges around supply chains and labour shortages, operators that prioritise these areas will be an incredibly strong position for the long-term.”

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