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A recent Barclays report found that 51% of hospitality and leisure businesses expect to expand their operations over the next three years.
The research revealed that 65% of companies are increasing investment in experience-led offerings, even as rising inflation and geopolitical uncertainty impact consumer confidence.
Meanwhile, 60% of industry leaders expect summer entertainment and sporting events to boost performance.
While total sector cash inflows fell 5.6%, activity-based businesses saw growth, with botanical and zoological gardens recording a 6.1% increase.
A distinct split has emerged between smaller and larger companies regarding funding. According to the report, small and medium-sized enterprises reduced borrowing by 12.7% last quarter, whereas larger firms increased loan volumes by 3.2% to operationalise capital and invest in new projects.
The business changes coincide with pressure from the national living wage increase, which caused rising staff costs for 33% of operators.
Consequently, 31% of leaders feel forced to raise customer prices, while 30% are accepting lower profit margins.
Rich Robinson, head of hospitality and leisure at Barclays, said: “Hospitality and leisure businesses are showing real resilience as they navigate higher costs and ongoing uncertainty. Our research shows many are responding by investing in the customer experience, using technology to build loyalty, and adapting their offering to meet changing expectations.
“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.”
