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2024’s First Quarter Shows Promising Signs for Hospitality

For one of the first times since the 2019 pandemic hit, the rate of hospitality closures has slowed down in the first quarter of 2024.

Fewer Site Closures

In 2023 we saw a staggering average of 8 sites close a day across the UK. In the first quarter of 2024, this number lowered to an average of 4 sites per day.

Research shows that throughout this period (January to March) there was a 0.4% drop in the total number of pubs, restaurants, bars, hotels and other forms of licenced premises. The third smallest quarter-on-quarter drop since the start of the COVID-19 pandemic.

The market is down 2.5% year on year, meaning about 1 in 40 venues closed over the last 12 months. This latest quarter brings cautious confidence and optimism to the hospitality sector.

There has also been a noticeable increase in the number of new openings for the sector, which achieved a 0.5% growth last quarter for the first time since March 2020.

Ease of Cost Pressures

The slight easing of cost pressures alongside the improved rate of user spending seems to possibly be slowing the rate of business closures throughout the UK.

Even with this easing of pressures and drop in the number of venue closures, there are some differing opinions. The proportion of hospitality leaders who feel optimistic about their own business in the next year fell from 57% in February to 53% now.

Wage Costs

A defining feature of this decline in optimism is the pressure of wage costs. The national living wage increased at the start of April, which saw wages rise by 8.9%. Despite the pressures easing for energy and food and drink costs, pay remains a significant burden to the hospitality industry.

On a positive note, this higher pay has cut the number of vacancies within the industry by almost half, with around only 6% of roles open now compared to 10% in January.