Spending and demand in the hospitality sector in Greater Manchester has recovered to pre-pandemic levels, boosted in the past quarter according to data released today by the Greater Manchester Chambers of Commerce.
In its quarterly Economic Outlook report released today (14 December), the Chamber revealed that the hospitality sector has recovered better than its counterparts in retail, with spending across hospitality in the city region now marginally exceeding pre-pandemic levels, attributed to Christmas shopping, inbound regional tourism and World Cup fixtures boosting trade for pubs and bars.
The survey of 324 businesses held between November 7th and November 30th also revealed spending in outer boroughs of the region has been bolstered by customers staying local, a contrasting picture to that of the city centre where struggles continue in the main due to the changing work habits and well publicised transport difficulties.
Sacha Lord, Night Time Economy Adviser for Greater Manchester and Chair of the Night Time Industries Association (NTIA) who has launched a ‘Give the Gift of Going Out’ initiative to encourage spending over the Christmas and New Year period, said:
“Trading across Greater Manchester has been quietly improving in the past 12 months, and given how much the region suffered, our recovery post-pandemic has been pleasing. There have been some extremely tough times, but the region is outperforming multiple cities including London in its recovery and this is testament to the strength of the sector and the ability of the region to attract tourists.
“However, we cannot be complacent, and although I am confident the sector can sustain its recovery, the first quarter of 2023 will be extremely tough. January is a difficult month in any year, but add in the complexities of a stuttering economy, historic covid-related debt piles and the cost of living crisis, and we are forecasting a severe drop in consumer spending which businesses must prepare for.”
The results also highlighted significant and ongoing financial difficulties for many operators. While data showed consumer spending has improved, the number of businesses in negative cash flow remains high, signalling the potential for financial distress in the first six months of 2023.
Lord continued, “Business cash flow has suffered a heavy blow, burdened by the uptake of debt to weather the pandemic, and rising costs of inflation which has had a severe impact on budgets. This isn’t just a Northern problem it’s nationwide and businesses across the country are suffering.
“In an ideal world, we would be advising operators to stockpile now in order to reserve cash flow, but clearly this is an impossible strategy given the lack of a solid starting ground. We will continue to push for further financial support for operators and continue to support business owners as we move into the next period of recovery.”
Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, said:
“Spending during Black Friday sales contributed to an uptick in service sector activity. So has increased hospitality spend in the lead up to the festive season. It is also likely that the FIFA World Cup, particularly the progression of the England football team, led to increased patronage at pubs and bars giving a boost to the hospitality sector.
“However, the post-Christmas period presents some concerns. There are valid questions around the ability of households to sustain consumer spending beyond the festive season, which could affect economic growth and business sentiment.”
