A new white paper from Deloitte has highlighted a strong correlation between consumer confidence and spending on leisure - and after more than a year of steady growth, both measures dipped sharply in the third quarter of 2018. This certainly points to a gloomier outlook for 2019, but also suggests that savvy customers are becoming more in tune with economic forecasts. And burdened with concerns around debt and disposable income, many people are choosing to sacrifice a degree of discretionary spending.
Winners and losers
Deloitte analysed leisure spending in 11 component categories, and the three biggest fallers in the quarter were dining out, drinking in pubs & bars, and in-home leisure. At the other end of the performance scale, spending on short breaks and live sports events showed a small increase. Although year-on-year spending across the sector has been flat, there have been some clear winners and losers. Restaurants have been hit hard, while long-haul holidays have enjoyed strong growth, driven largely by the over-55’s, with 18-34’s prioritising spending on everyday leisure activities.
The medium-term outlook for the leisure sector doesn’t differ greatly from the Q3 snapshot, and it seems inevitable that the restaurant sector will continuing to face tough challenges. This is reflected in recent figures which show that the number of UK restaurants filing for insolvency has nearly doubled over the past eight years - with oversupply, weak demand and high business rates cited as the main factors behind the insolvency epidemic.
As news of a potential global downturn begins to crystallize (driven by a looming US/China trade war, possible Brexit and increased economic uncertainty), consumer confidence is responding accordingly. Householders are tightening their belts to focus on paying off debt, and this is affecting discretionary leisure spending. Of course, knowledge of this doesn’t help struggling leisure brands, but an understanding of how leisure spending fluctuates in line with consumer confidence can help businesses to plan more effectively. And armed with this knowledge, they can build greater flexibility into their business models - both to ride out the tough times, and to take full advantage when the good times return.
Talent is key to success
The ability to enhance operational flexibility, to manage through a downturn, and to exploit emerging opportunities requires smart leadership, and finding talented executives with the experience and expertise to consistently deliver success in all market conditions is a challenging task. Stone Executive headhunters specialise in identifying and recruiting the brightest talent in the business. As specialists in travel, hospitality and leisure, we help clients to identify and attract high-calibre senior talent with the ability to deliver genuine bottom-line impact. As a leading leisure executive search firm, our hospitality and leisure headhunters boast a professional network that spans global leisure brands and regional chains, plus many of the most talented hospitality and leisure executives in the business.
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