When the Collins Dictionary chose ‘permacrisis’ as their word of the year in 2022, they might have had leisure and hospitality in mind.
Few industries have been as heavily impacted first by Covid-19, followed swiftly by the global cost of living crisis.
Businesses are also feeling the impact of new technologies and competitors, from sharing platforms to fitness trackers.
Consumer preferences are changing fast, making it hard to keep pace and maintain customer satisfaction.
We wanted to find out how businesses are coping in the face of these challenges – and also where they see the opportunities emerging that can lead to growth over the longer term.
Our survey includes a broad cross-section of traditional leisure and hospitality businesses, as well as providers of in-home entertainment, such as gaming.
Post-pandemic recovery still a work in progress
Covid-19 hit traditional leisure and hospitality hard. 44% of respondents said risk-related losses were higher or much higher than expected over the last two years.
Businesses in our survey are still feeling the long-term impacts, including a skills gap from staff leaving the sector (47%) and the shift to leisure activities at home (45%).
Switch to digital will be pandemic’s greatest legacy
The pandemic may have provided a spur for companies to embrace new technologies and create innovative new offerings.
Almost three-quarters (70%) said that an accelerated switch to digital first will be the greatest long-term legacy of Covid-19.
Profitability is higher strategic priority than growth
With the global cost of living crisis following hard on the heels of the pandemic, it’s not surprising that company strategies are more focused on improving margins (46%) and growth through acquisition (48%) than on organic sales growth (35%) over the next two years.
Businesses feel risks are not within their control
The sense of permacrisis in the industry may be making it harder to manage risks. Only 28% said the root causes of their risks were somewhat or completely within their control.
Interestingly, almost three-quarters (74%) said they lacked the data or knowledge they needed to address their risks.
Competition from tech-savvy entrants is hotting up
From home delivery apps to fitness trackers, new providers are looking to disrupt traditional leisure and hospitality business models and eat into market share.
More than half (52%) of our respondents said increased competition from outside the sector was among the greatest obstacles to achieving their strategic objectives.
Firms struggle to keep up with changing tastes
Younger consumers want new experiences and Instagram-able moments, both online and in person, which can be challenging to deliver.
This may explain why changing customer tastes and preferences were the second greatest obstacle to achieving strategic objectives (42%).
Reputational risk is rising up the agenda
A majority of businesses (59%) now measure and monitor their reputation to help identify and prevent potential threats that could tarnish their good name.
46% think having insurance for reputation risks is necessary and 22% say it’s mission critical.
To learn more, download your free survey report by completing the short form at the top of this page.
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