Last year was a mixed bag for the leisure industry with the excitement of the Queen’s Jubilee and the London Olympics balanced by a spate of wet weather, driving would-be spenders back inside.
There is no denying that conditions have been – and still are – challenging for businesses, but there are some positive signs.
In an independent survey of our leisure customers, 48% said they believed their business would grow in the next year, with 73% saying they were either optimistic or very optimistic about 2013.
Historically the leisure sector has performed in line with the growth of the UK economy. But since 2010 has outperformed the sluggish UK economy, despite economic headwinds facing consumers and businesses.
This is a sign that the industry is still strong and it’s great to see such a sense of optimism returning to the market. However, it is key that businesses in the sector are continuing to reinvest to ensure they remain competitive.
This was one of the biggest issues recorded in our survey – with one in four UK leisure businesses feeling they are losing out to competitors due to lack of investment.
The research, which surveyed SMEs across the leisure industry, showed 30% of respondents didn’t feel they invested sufficiently in 2012 to remain competitive, while 55% felt investment in refurbishment or new equipment would make a positive impact on their business.
This is slightly worrying when it comes to the future of the industry.
It is vital for leisure businesses to invest in the quality of their offering – whether that is a restaurant, hotel or any of the many types of leisure businesses. This is probably true more so for leisure than other industries as consumers do not want to spend their hard earned cash in tired/dated offerings.
Generating around £97bn of GDP and nearly two million jobs, the industry is vital for the UK economy and one that could play a massive role in the recovery.
Whilst over the past decade the quality of the visitor experience in England has excelled, we need to ensure that we keep on top of our game to beat off competition from overseas destinations.
Our reputation as a top quality, must -see destination relies on our ability to provide high quality experiences across all sectors of the industry.
Continual re-investment is therefore paramount to achieving consistency – something which is vital in securing repeat visitors and those we are welcoming for the first time.
Another key issue highlighted in our research was the impact of adverse weather. A surprising 74% of businesses said they had not made any additional allowances for bad weather conditions this summer – despite nearly half of respondents noting July and August as their most profitable months.
The summer months are a lifeline for many leisure businesses but as we saw last year – the second wettest on record for the UK – it is easy for the weather to turn the tables and force people inside.
Andrew Taylor is head of leisure for commercial banking at NatWest