UKHospitality: A changing landscape

Chief executive Kate Nicholls shares the results from UKHospitality’s new Christie and Co Benchmarking Report...

Last published in 2018 – ah, halcyon days! – and on the back of the merger of the British Hospitality Association and the Association of Licensed Multiple Retailers to form UKHospitality, our influential benchmarking report is back after a four-year interlude during which the sector has experienced seismic upheavals. Paused so that the new trade body could settle into its role, our in-depth survey-based look at the industry returns with the publication of The UKHospitality Christie and Co Benchmarking Report 2022.

Due to the impact of coronavirus in 2021 and the restricted trading in the first half of the year, the report covers the six months up to and including 31st December 2021 and, significantly, now includes hotels. This latest edition provides a snapshot of an industry emerging slowly from one of the most difficult challenges it has ever faced, and which means an in-depth understanding of turnover and controllable operating costs are more integral to business planning and success than ever before.

A total of 108 UKHospitality members participated in the survey, providing data on 4,791 licensed managed outlets, with 15 companies providing responses covering 357 hotels. And, while contract caterers were not surveyed, we believe they can glean invaluable businesses intelligence from the report.

A couple of important trends are evident: as consumer demand continues to change, operators are finding new ways to drive business, with accommodation sales now making up a significant proportion of overall revenue. There was also a contraction in revenue of 2.3%, with just three segments in growth, two of which are accommodation-led and nightclubs – outrunning inflation.

Other findings revealed that average capital expenditure across the entire survey was 4.1%, a 0.6 percentage points (ppts) increase on the previous survey. However, given the four-year gap since the last survey and the sweeping effects of the pandemic, it is difficult to know exactly where the sector investment cycle rests, and next year’s survey – the edition marks the return to annual publication – should bring the picture in proper focus.

Unsurprisingly, the average overheads of running a licensed premises rose 2.7ppts since 2018, now standing at 55.2% of annual turnover, the highest total since 2007. And, while payroll costs are still the single highest outgoing for operators, there’s actually been a small 1.2ppts decrease to 28.3% over the year, mostly driven by staff shortages – so more is being done by fewer people – and investment in technology. Utility, premises and operational costs were the drivers of overall expenses, representing 27% of turnover on average.

The original benchmarking survey – way back in 2007 – aimed at providing ‘an understanding of the average costs associated with running a licensed business in the UK’, and we believe that, 15 years and 13 editions later, it remains as relevant to operators and their suppliers now as it did then.

Christie and Co is a strategic partner for business buyers and sellers, offering experience and insight in sectors including hotels, pubs, restaurants and leisure. The full report is available to view at www.ukhospitality.org.uk.

You may also be interested in…