South: Horizon brighter for tourism and leisure sectors, says MHA survey

Around one third of staff working in guest houses, hotels, restaurants and pubs are now employed on zero-hours contracts, according to the latest 'Travel & Tourism Survey' conducted by MHA, the UK-wide association of chartered accountants and business advisers.

Yet, despite the flexibility that this arrangement offers employers, well over 60% of these staff regularly work 20 hours or more – with more than three quarters of these routinely employed for 40 hours per week.

The survey paints a picture of an industry starting to benefit from an upturn in trading conditions, with 56% reporting improved profitability in the past 12 months and 58% predicting that 2014 will be better still. However, 50% cited turnover either stagnant or growing by less than 5% over the past 12 months.

“The travel and tourism sector is emerging from a sustained period of low growth, but with discretionary spending improving across the economy as a whole, the hope is that – weather permitting – the year ahead will see the return of profitability capable of supporting future investment plans,” said Andrew Burnham, head of the MHA Travel and Leisure sector group.

“One indicator of this growing confidence is the number of employees working extended hours on zero-hours contracts – this sector was always going to be an adopter of this employment option, but the numbers working what might be considered a ‘standard’ working week suggest that this arrangement is working for both parties.”

Almost a quarter of the operators covered by the survey look set to increase investment this year in premises refurbishment, while 16% will be spending more on marketing  – particularly social media – to support business development.

Online bookings increased for 62% of respondents in the past 12 months, although 46% still say they see little or no benefit in engagement with Facebook and Twitter etc. Those that are active use social networks for loyalty schemes, responding to customer queries and brand building.

“For a sector so reliant upon personal service and positive communication, there is perhaps a surprising reluctance among a significant minority to embrace the social media era,” said Burnham, “particularly when the volume of bookings being made online is increasing year-on-year.”

This sector is also focused on the green agenda, with 82% having environmental policies in place. That said, the vast majority said they had no plans to introduce energy efficiency measures such as solar arrays or biomass boilers – and 40% were not even aware of the tax breaks offered for such investments.

“Perhaps the recent challenging economic environment has pushed investment in this area down the agenda, but it is certainly worth operators noting that with the increased Annual Investment Allowance now standing at £500,000 until December 2015, this could be a good time for companies to think seriously about capital expenditure. Not only will this provide financial benefit – it will also enhance the brand appeal to consumers who are becoming increasingly conscious of environmental issues,” concluded Burnham.