Bouncing Back: Hospitality and Leisure in the UK, USA and Europe

The COVID-19 pandemic highlighted the vital importance of the hospitality and leisure industry to the global economy. When the pandemic rapidly spread across the globe, nations had to take drastic steps to protect their citizens. Lockdowns and travel restrictions ground the hospitality and leisure industries to a halt, leading to millions of job losses worldwide. However, as the vaccine rollout continues, demand for hospitality and leisure services is rising once again, and in places, exceeding pre-pandemic demand.

United Kingdom

In the UK, the hospitality industry represents 10% of UK employment, comprising 6% of the UK’s businesses and 5% of GDP. The COVID-19 pandemic made the industry grind to a sudden halt; approximately 80% of hospitality firms stopped trading in April 2020.

However, the majority of hospitality and leisure subsectors are bouncing back from the pandemic-induced decline, and they are bouncing back rapidly. Additionally, they are performing much better than they were pre-pandemic, due in part to pent-up demand. Our data reveals that online search demand for several subsectors increased significantly between July and August in 2020 when the first UK lockdown eased. 

UK online search demand

Pubs, Bars and Restaurants

Restaurants saw the biggest increase in online search demand by far. We found that online search demand began rising sharply in July, coinciding with ‘Freedom Day’ on the 19th July, where the vast majority of social contact restrictions eased in England. A significant spike in demand came in early August when the Eat Out to Help Out scheme launched. 72,000 establishments participated in the scheme, which was launched to “help protect the jobs of 1.8 million chefs, waiters and restaurateurs” in the words of the UK’s Chancellor of the Exchequer, Rishi Sunak. Pubs and bars experienced an increase in search demand around the same time, but the spike was much less pronounced as bars did not receive an ‘Eat Out to Help Out’ style scheme. 

Pubs, bars and restaurants all saw significant spikes in online search demand in May 2021, when hospitality establishments could legally serve customers indoors. Furthermore, as outlined below, we see that between February and July 2021, online search demand increased for pubs and bars by 758 per cent and by 210 per cent for restaurants, indicating renewed interest.

Nightlife and Festivals 

Nightclubs and festivals have suffered heavy losses because of the pandemic. The Night Time Industries Association estimates that the nighttime economy in the UK contributes £66 billion per year to the UK economy, making the sector the UK’s fifth-largest industry.

However, there is optimism in the sector. Online search demand for nightclubs and festivals spiked significantly (+115%) in July 2021, when social restrictions were lifted. Several festivals are going ahead this year after COVID-19 wiped out the festival season last year. Popular festivals such as Boardmasters, Creamfields, Leeds, and Reading Festival and Latitude have gone ahead. However, many have cancelled or moved the event online due to concerns about the virus. Despite the uncertainty surrounding the virus, online search demand for nightlife and festivals increased by 281 per cent between February and July in 2021.

UK

Cinemas and Theatres

In the UK, cinemas and theatres have not fared as well as restaurants, pubs and bars, and their future is uncertain. Online search demand is yet to reach pre-pandemic levels. UK cinema box office takings in the month after restrictions were lifted were half of their pre-pandemic level. Phil Clapp, chief executive of the UK Cinema Association, said: “It’s clear that there is still some reluctance among certain audience segments to return, and that’s particularly true among older audiences” but that “people [in the industry] are very pleased with the response of the public to the reopening of cinemas”.

The outlook for hospitality and leisure in the UK, according to online search demand, looks relatively bright. However, new problems have arisen that will likely affect the sector’s recovery, such as staff shortages and cash reserve issues. Consequently, a full sector recovery may take years to achieve. 

United States

In February 2020, over 16 million people in the US were employed in the hospitality and leisure industry. The figure fell to over 8 million in April 2020, and the latest preliminary results for July 2021 show that just over 15 million people are currently employed in the industry. The recovery of jobs in the industry shows that demand is returning, but employment numbers have not yet reached pre-pandemic levels. 

US online search demand

Pubs, bars, and restaurants

In the US, pubs, bars, and restaurants have experienced significant difficulties. In a letter sent to the majority and minority leaders in the Senate and the House of Representatives in December 2020, the National Restaurant Association expressed their concerns. The Association conducted a nationwide survey of their membership and found that 87% of full-service restaurants reported an average 36 per cent drop in sales revenue.

Our data reveals that restaurants in the US are recovering from the pandemic. Online search demand for restaurants increased by 46 per cent between January and July 2021 as more Americans were vaccinated. Overall, online search demand for restaurants has exceeded pre-pandemic levels. Online search demand data indicates that pubs and bars experienced more difficulty than restaurants. Between August 2019 and July 2020, online search demand decreased by 10.4%. However, between August 2020 and July 2021, online search demand increased by 32.5%, indicating renewed interest. 

 

Nightlife and Festivals

A similar situation to the UK, nightclubs and festivals took a big financial hit due to the pandemic. However, the vaccine rollout appears to be instilling consumer confidence in the industry as online search demand has increased by 176 per cent between January and July of this year. Festivals were all but absent in 2020 as the pandemic raged on, but the 2021 summer season has been successful due to pent-up demand. Akshay Khanna, general manager of ticket exchange at StubHub, said: “Demand is roaring back in a way that’s exceeding our expectations” and that the demand is “driven by confidence in the vaccine program and the sheer numbers of vaccinations since February.” 

US

Cinemas and Theatres

In the US, the outlook for cinemas is looking bleak. Cinemas and theatres in the US had a higher level of demand than in the UK, but they’ve seen the most significant dips in demand during the pandemic. Our data reveals that cinemas and theatres are experiencing slower growth than the other sectors we’ve investigated. Between January and July of 2021, online search demand for cinemas and theatres increased by 171 per cent. While some sectors have risen above pre-pandemic levels, cinemas and theatres continue to fall behind. Between August 2020 and July 2021, online search demand decreased by 39.7 per cent. It will likely take months for them to reach pre-pandemic levels.

The majority of hospitality and leisure subsectors in the United States are gradually bouncing back from the pandemic-induced devastation. However, similar to the UK, it will take time for all sectors to fully recover.

Europe: Germany, France, Italy, and Spain

Germany, France, Italy, and Spain are nations that are heavily economically reliant on tourism. The tourism industry in the European Union is made up of 2.3 million businesses that employ an estimated 12.3 million people. The performance of the hospitality and leisure industry in Germany, France, Italy, and Spain is heavily dependent on tourism, an industry that ground to a halt because of the pandemic. 

Our data reveals that the majority of industries are bouncing back rapidly, and most are reaching or exceeding pre-pandemic levels due to pent-up demand.

EU online search demand

Pubs, Bars and Restaurants

Our data reveals that online search demand for pubs, bars, and restaurants has now exceeded pre-pandemic demand and is experiencing a boom. We found that between January and July 2021, online search demand increased by 519 per cent. As with all the subsectors, online search demand for pubs, bars, and restaurants experienced a steep decline in March, April, and May as the pandemic worsened. However, out of all the categories investigated, pubs and bars saw the biggest spike in demand when they reopened during the first half of 2021.

Nightlife and Festivals

Nightclubs and festivals have recently reopened in European countries. Online search demand is trending upwards for this category, but concerns about the spreading Delta variant may affect this in the future. Nightlife and festivals saw the slowest online search demand growth out of all five categories we investigated, with a 104 per cent increase in online searches between January and July 2021, hinting at consumer hesitancy.

Europe

Cinemas and Theatres

Cinemas and theatres are not faring well in Europe compared to the other sectors we investigated. Consumer demand remains low compared to other sectors; between August 2020 and July 2021, online search demand decreased by 41.5%. As the vaccine rollout continues, will cinemas and theatres reach pre-pandemic search demand levels or ticket numbers? Or is the sector in serious trouble? 

Bouncing back

After multiple waves of the virus and changing restrictions, consumers in the UK, US, and Europe are ready to embrace the hospitality and leisure sector. However, not all subsectors are recovering well. While restaurants, pubs, and bars are making good progress, cinemas and theatres are still struggling to attract consumers, even as more people achieve vaccine immunity. Hospitality and leisure businesses across the globe must continue to build customer confidence by offering consumers a safe way to enjoy the activities they used to delight in pre-pandemic.

This article features multi-source, triangulated data insights generated by onefourzero’s expert consultants. To learn more about how we can assist your business by providing data with commercial value please click here.