Wed 8th May 2024 - Rate of hospitality closures slows as managed groups see resilient start to 2024 Rate of hospitality closures slows as managed groups see resilient start to 2024: Closures in Britain’s hospitality sector slowed from eight sites a day in 2023 to four a day in the first quarter of 2024, the latest Hospitality Market Monitor from CGA by NIQ and AlixPartners reveals. The findings indicate a 0.4% decline in total numbers between the start of January and the end of March – the third smallest quarter-on-quarter drop since the start of the covid-19 pandemic. The current total of 98,745 hospitality venues (pubs, bars, restaurants, hotels and other forms of licensed premises) means the market is down by 2.5% year-on-year, meaning one in 40 venues has shut in the past 12 months. However, the latest three-month snapshot provides cautious confidence that a slight easing of cost pressures may be starting to put the brakes on business closures. The monitor shows positive trends in the eating-out side of the market; food-led site numbers increased by 0.1% in the first quarter of 2024, compared with drops of 0.7% and 0.4% in drink-led and accommodation businesses. The monitor shows this marginal growth has been driven by a modest revival for casual dining and independent restaurants. These two segments recorded a combined net decline of 21.0% of sites between the start of the pandemic in March 2020 and December 2023 but appear to have stabilised and achieved 0.5% growth in the first quarter of 2024. Despite improving trends, the independent restaurant segment remains vulnerable, experiencing a 22% decline between March 2020 and December 2023. Managed multi-site hospitality groups have had a resilient start to 2024, the monitor reveals. While the independent and leased segments of the market contracted by 0.4% and 0.7% respectively in the first quarter, numbers in the managed channel were virtually level with December 2023. Some groups have been forced to close sites in early 2024, but many vacated premises have been swiftly reoccupied by new operators. Kate Nicholls, chief executive of UKHospitality, said: “Four hospitality venues closing a day is still four too many. These closures rob communities of all the benefits hospitality serves up for Britain – the crucial job opportunities, local economic growth and hubs for communities. The closure rate may have halved, but we’re still losing venues and that is not acceptable. It remains the case that the cost burden for the sector is too high, and we need to see those costs rebalanced and reduced, if we are to build on some of the growth we are seeing.” Graeme Smith, AlixPartners’ managing director, and head of leisure, corporate finance, added: “Another key indicator for the hospitality market is M&A activity, which is building momentum, partly on the back of this easing of market pressures, and also as interest rates stabilise and financing markets open up. Debt is available – albeit more expensive than it used to be. As a consequence, we expect these more stable conditions to continue to translate into fewer closures and more M&A deal activity.”