Tue 27th Jun 2023 - London’s hospitality sector stabilises in first quarter, could return to site growth by third quarter London’s hospitality sector stabilises in first quarter following return of office workers and tourists, could return to site growth by third quarter: Central London’s hospitality sector is “back on its feet” after suffering hundreds of closures of licensed premises during the turmoil of covid-19, and could even return to site growth by the autumn. The latest Hospitality Market Monitor from CGA by NIQ and AlixPartners showed central London saw a net decline of 540 licensed premises in the three years between March 2020 and March 2023, 15.6% of the city’s pre-covid total and equivalent to one closure every two days. The heavy toll reflected London’s dependence on commuters and domestic and overseas tourists for hospitality visits. With millions of people working from home and international travel severely restricted in 2020 and 2021, many pubs, bars and restaurants, especially independents, became unsustainable. However, the return of office workers and visitors since 2022 means the downward trend may be bottoming out, according to the monitor. It indicated London saw a net decline of only 1.0% of its licensed premises in the first quarter of 2023, after a dip of just 0.2% in the fourth quarter of 2022. This improving picture is reinforced by figures from the Coffer CGA Business Tracker, which has shown that year-on-year sales growth for managed operators within the M25 has been around twice as high as in the rest of Britain over the first few months of 2023. London’s city centre is by far hospitality’s most concentrated and significant market in the UK, with nearly 3,000 licensed premises, more than Britain’s six next biggest city centres put together. Graeme Smith, managing director at AlixPartners, said: “This stabilisation of such an important hospitality market is encouraging and clearly underpinned by a return of significant footfall to central London. We may see ongoing closures as more vulnerable and indebted businesses succumb to the demanding trading environment. However, we know London remains a highly attractive market in the longer term, for strong operators with well-defined and differentiated propositions. As inflationary cost pressures ease, we would expect to see the capital return to site growth, possibly as soon as the third or fourth quarter of this year.” Karl Chessell, CGA’s director for hospitality operators and food, EMEA, added: “London businesses still face some daunting challenges including high inflation and labour shortages, and more closures can be expected, but it’s clear the sector is back on its feet.”