Hospitality sector sees cloudy outlook for consumers

Leisure businesses fear a "perfect storm" of problems including rising prices and fading consumer confidence as Brexit looms, according to a survey of leading bosses from the sector.

The report into the hospitality industry spoke to dozens of leaders and senior executives from firms including Domino's Pizza and Thomas Cook (Frankfurt: A0MR3W - news) , together representing businesses with revenues of more than £40bn.

Business leaders from easyJet, William Hill (Frankfurt: 633847 - news) , Costa Coffee, hotel chain Marriott, cruise operator Carnival (LSE: CCL.L - news) and Madame Tussauds owner Merlin were also among the contributors.

The report from executive search firm Heidrick & Struggles with the British Hospitality Association (BHA (Brussels: BE0032095854.BR - news) ) found 55% of leaders in the sector were "concerned" about the economy.

It said the cost of food imports - thanks to the fall in the pound since the Brexit vote - was a particular worry.

The higher costs will mean higher bills for holidaymakers and diners but most bosses said consumers were yet to have seen these take effect.

It adds to Brexit concerns facing the hospitality industry, which is heavily reliant on European workers and faces a recruitment gap of more than a million jobs by 2029 according to a separate BHA report earlier this year.

Ben Twynam, partner at Heidrick & Struggles, said: "While industry leaders are relatively confident about the remainder of 2017, they are far more pessimistic about the two years thereafter, when the real impact of Brexit will come to fruition."

BHA chief executive Ufi Ibrahim said: "It is no exaggeration to say that hospitality and tourism face a perfect storm."

The report comes after revised official growth figures last week showed the distribution, hotels and restaurants sub-sector of the economy shrank in the first quarter - the first decline since the end of 2012.

Britain's economy grew by just 0.2% at the start of 2017, according to the data from the Office for National Statistics - down from an initial estimate of 0.3%.