The hospitality and leisure sector’s post-pandemic recovery could be severely hampered by the cost-of-living crisis and a widespread lack of staff.
This is according to a report from Barclays Corporate Banking, which shows that 68% of sector operators in Scotland are confident of growth this year, predicting an average 23.6% uplift in revenue compared with pre-pandemic levels. This equates to a £2.1bn rise in annual turnover compared with 2019, and a £3.5bn increase on 2021.
However, the predicted growth could be stifled by soaring supplier costs and a scramble for talent. Hospitality and leisure businesses in Scotland report that their utility bills have already spiked by 36% year-on-year on average.
Meanwhile, 96% of companies in the Scottish sector are struggling to recruit personnel, with vacancies for cleaning staff (22%), senior management (20%), and finance staff (20%) causing the most issues.
The report is based on market research conducted during April by Censuswide among 605 senior managers within UK-based hospitality and leisure businesses.
Almost a fifth (16%) of bars and restaurants are finding it difficult to hire waiting staff, and over two fifths of gyms and leisure centres (42%) cannot find fitness instructors. Recruitment issues also extend to back-of-house and c-suite roles: 17% of operators are having trouble sourcing finance staff and 16% said the same about senior management positions.
In response, hospitality and leisure operators in Scotland are establishing new incentives to recruit and retain talent.
Becoming a B Corp (32%) is the most popular measure, followed by permanent flexible working arrangements (30%) and changes to the way staff are tipped so they receive more (24%).
Almost one in five employers (19%) have also increased wages given to staff.
Senior managers are set to receive the biggest boost to their pay packets, with an average increase of 7.7% - equivalent to £2,014 a year for a full-time worker.
Delivery riders and drivers will receive an average increase of 7.5% (£1,616 per year for a full-time worker), followed by housekeeping staff (7.4%), bar staff (7.3%) and finance staff (7.3%). Kitchen staff will receive a 6.9% rise on average, equivalent to a salary bump of £1,196 for a full-timer.
Full list of job roles and salary increases for 2022:
Role |
Percentage increase |
Average full-time increase |
Senior management |
7.7% |
£2,014 |
Sales staff |
7.2% |
£2,206 |
Marketing staff |
7.2% |
£2,025 |
Finance staff |
7.3% |
£1,936 |
General maintenance |
7.2% |
£1,651 |
Delivery staff |
7.5% |
£1,616 |
Staff with ESG expertise |
7.1% |
£1,427 |
Cleaning staff |
7.0% |
£1,380 |
Front of house |
6.7% |
£1,328 |
Housekeeping |
7.4% |
£1,642 |
Fitness instructors |
6.4% |
£1,200 |
Kitchen staff |
6.9% |
£1,196 |
Masseurs/masseuses |
5.9% |
£1,196 |
Waiting staff |
7.1% |
£1,164 |
Bar staff |
7.3% |
£1,145 |
Another survey finding is the industry’s plans to offer employment to those fleeing the conflict in Ukraine. In Scotland, 86% of surveyed businesses plan to hire refugees.
The report also shows that, for the time being at least, the industry’s finances allow for pay rises and other investments.
Profit margins of hospitality and leisure operators from Scotland are now at 35.9% on average, compared to 47% pre-pandemic.
Mike Saul, head of hospitality and leisure at Barclays Corporate Banking, commented: “The worsening cost-of-living crisis is now a serious threat to that growth, with the latest Barclaycard Consumer Spending Index showing that restaurants, bars, pubs and clubs have all seen a slight decline in May 2022, compared to the month before.
“Crucially for the industry, our research shows that talent shortages are also a major concern, with businesses in every vertical finding it challenging to fill their vacancies - meaning there is now an added imperative for hospitality and leisure firms to find new and novel ways to recruit, reward and retain their staff.”
Other pandemic trends revealed by the research include 38% of firms in the sector starting to accept new payment methods, such as Apple Pay and Google Pay, while almost half (45%) of restaurants have introduced additional payment terminals, as have 42% of pubs.
Almost one in three (30%) restaurants continues to diversify by introducing home delivery options, such as meal kits.
A quarter (26%) of operators also state they are selling more ‘value’ product ranges this year, followed by 23% who say they are selling more locally sourced produce.
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