Profits up as tourism bounce continues

Two thirds of hotel and hospitality businesses saw an increase in sales and profits in the last 12-months, according to a major report on the leisure sector.

The annual MHA Hospitality and Tourism Survey, put together in conjunction with North West accountants Moore and Smalley, shows that 67% of hospitality businesses increased turnover while 64% increased profits.

More than half of respondents (52%) expect a further increase in profits in the next 12-months.

In another sign of confidence in the sector almost nine in 10 (89%) leisure operators indicated they would be investing in improvements to buildings and infrastructure, while more than half will also be investing in staff training and marketing.

More than 100 regional hotel and tourism operators were interviewed as part of the research by Moore and Smalley and MHA, a group of UK independent accountancy and business advisory firms.

Colin Johnson, head of the leisure and tourism team at Moore and Smalley in Kendal, said: “The findings of this research are encouraging and paint a picture of growth and optimism in the leisure sector as the summer season gets underway.

“We mustn’t get carried away though as there are still many challenges for hotel and leisure businesses to overcome. The full impact of the National Living Wage on profits is still unknown and some business are still to get to grips with auto-enrolment pension legislation. These are two major issues that tourism businesses need to plan for.”

Other findings of the survey included:

  • 55% of respondents employ staff on zero hour contracts. 35% of these employees are given at least 21 hours a week.
  • 60% have not yet had to auto enrol their staff into a pension scheme. Of those, 34% haven’t yet put a plan in place for auto enrolment
  • 63% would like to see more help from their local authority to promote their region and improve business in their area.
  • 53% would like to see more marketing to promote their region and improve business in their area.
  • 20% said they would be increasing prices to offset the effect of the National Living Wage.

The research also highlighted a 7% drop in the number of hotel and accommodation providers who are still unable to take online bookings, with only 17% now unable to accept reservations through the internet.

“In this highly competitive market it’s essential that businesses can take online bookings,” added Colin. “While it’s encouraging to see the vast majority of hotel and leisure businesses are now able to accept online bookings, there is still some way to go.”

Click here to view the Leisure and Tourism Survey findings.