Hospitality and leisure SMEs anticipate 21 per cent revenue increase as restrictions continue to ease
- SMEs are now more optimistic than pre-pandemic, predicting a 9.8 per cent increase in revenue this quarter compared to Q1 2021 – jumping to 21 per cent for the hospitality and leisure sector
- 85 per cent of SMEs are planning to invest over the next 12 months by adding staff, new equipment or technology, and ramping up their marketing
- As restrictions continue to ease, restaurants, pubs and bars expect to busy, with a quarter of hospitality and leisure SMEs anticipating high demand
- Brits heading out will need to be organised: hospitality and leisure venues expect customers will need book at least five days in advance to secure a reservation
With lockdown restrictions continuing to ease across the UK, new research from Barclaycard Payments finds that SMEs predict a 9.8 per cent rise in revenue this quarter compared to Q1 2021 – marking the highest anticipated increase since the SME Barometer was launched in February 2020.
The research, which polled over 670 senior staff working in UK SMEs, also shows business sentiment is starting to look more positive, at 110 points out of a possible 200**. This is up from a low of just 79 points in Q2 2020, and means SMEs are back to the same pre-pandemic sentiment levels of 110 last seen in February 2020.
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. After a tough year for many jobseekers, a reassuring 47 per cent of SMEs also expect to increase their staff over the next year.
Over half (51 per cent) of SMEs expect an increase in revenues from 17th May, when the next stage of restrictions will be lifted. This is supported by Barclaycard Payment’s acquiring data, which shows that hospitality and leisure SMEs saw the number of payments processed up 105 per cent in the last week of April, compared to the first week, following outdoor hospitality venues opening from the 12th April***.
Looking ahead, SMEs are forecasting an 18 per cent increase in revenues a year from now, with the hospitality and leisure sector expecting a 42 per cent boost. Many SMEs have an optimistic (33 per cent) or neutral (40 per cent) outlook for the UK economy, which increases to 51 per cent optimistic and 36 per cent neutral about the prospects for their own businesses.
Customers must book ahead to secure a bookings
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.
Summer remains challenging
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 21st June. 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.”
Kate Hardcastle MBE, independent expert, said: “Speaking to small business owners, while they’re excited to be back in action, there’s a natural cautiousness about interest dropping off after an initial burst of spending. However, the overarching feeling is one of hopefulness for the year ahead – and with that, a drive to invest in their business and people. What they need now is our support. As we hit the summer months, I would encourage us to all do our bit to help our local SMEs and support their recovery.”
Notes to editors
About the Barometer and input breakdown
*Hospitality and leisure SMEs include a range of businesses including pubs, restaurants, spas, gyms, theme parks, leisure centres and sports clubs.
**To measure SME sentiment, Barclaycard and YouGov have aggregated SMEs’ viewpoints on 10 key topics to create an overall index score out of 200, with anything over 100 indicating a positive outlook, while anything under 100 is negative. The breakdown of key topics is below, including the change in sentiment score for each category from the Q1 2021 Barometer.
***Taken from ‘all food & drink’ category which contains Restaurants, Fast Food, Pubs & Bars, which have seen an increase of 104.7% in week 17 (w/c 5th April) compared to week 14 (w/c 26th April).
Measure |
Score Q2 2021 |
Score Q1 2021 |
Score Q2 2020 |
Score Q1 2020 |
Business sales pipeline |
120 |
105 |
87 |
118 |
Planned investment |
101 |
92 |
75 |
104 |
Supply chain |
124 |
119 |
111 |
131 |
Legislation impact |
92 |
87 |
89 |
96 |
Cash flow strength |
123 |
115 |
96 |
121 |
Raising finance |
112 |
101 |
81 |
116 |
UK economy prospects |
103 |
80 |
52 |
100 |
Sector prospects |
115 |
100 |
71 |
107 |
Business prospects |
124 |
110 |
83 |
118 |
Business stability |
88 |
71 |
47 |
92 |
NATIONAL AVERAGE |
110 |
98 |
87 |
110 |
NOTE: Micro businesses are defined as any business with a turnover of under £2m. Small businesses are those between £2m – £10m. Medium-sized businesses are £10m – £25m.
Find out more about the businesses that we are helping to manage the impact of the COVID-19 pandemic here.
For more information, please contact Polly Ewell at polly.ewell@barclaycard.co.uk or on +44 (0)7882 088493.
About the data
Research was conducted online by YouGov on behalf of Barclaycard Payments between 14th April – 4th May 2021. YouGov polled 678 senior members of staff working in UK SMEs, weighted by region to reflect SME distribution in the UK.
The term SME is defined in the release as: all three categories below, determined as a weighted percentage. Individual categories are defined as follows:
- Micro businesses under £ 2 million turnover.
- Small businesses are defined as those with a turnover of £2-10 million.
- Medium sized businesses are those defined with a turnover of over £10 million and up to £25 million.
About Barclaycard
Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit. In the UK we process nearly £1 in every £3 spent using credit and debit cards, and in 2020 we processed over £267bn in transactions globally. We also partner with a wide range of organisations across the globe to offer their customers or members payment options and credit.
Follow us on Twitter @BarclaycardNews
home.barclaycard
Follow us on Twitter @BarclaycardNews