Hospitality could benefit from covid health kick

Demand for healthy food, drink and leisure activities will be greater than ever, according to Barclays. David Burrows reports.

Pre-covid forecasts suggested leisure and hospitality businesses could gobble up £19.3bn of additional “wellness-related business revenue” come 2023. But Barclays Corporate Banking has had to adjust its figures to account for what it calls the “great reset” caused by the pandemic. “The virus has accelerated consumer demand for health and wellness offerings, driving the additional potential revenue boost by £2 billion,” the bank said.

So, instead of £19bn, the opportunity becomes £21bn. And food and drink has the “most to gain” from this covid health kick – £10.8bn in additional annual revenue by 2023.

Amid the stories of job losses, curfew chaos and diminishing consumer confidence, finally there is some good news. “Hospitality and leisure firms were already responding to the wellness trend, but they need to note the acceleration of the trend from both covid-19 and the intersection of societal, planetary and personal health,” Barclays said.

Prior to March’s lockdown, 23% of UK consumers felt health and wellbeing was extremely important to their day-to-day lives. Following the pandemic, this has jumped to one in three, representing an additional 4.8 million people, or 9% of the UK population. On average, respondents ranked the importance of health and wellness as 8.1 out of 10.

People are craving breaks, rest and healthier foods. Just over a quarter (26%) of the 515 businesses also surveyed by the bank said they currently offer health and wellness tips to customers as part of their experience. However, almost one in three (31%) Brits want health and wellness offerings, including healthy food, to be included “as standard” by hospitality and leisure sector establishments.

Top priorities include non-alcoholic drinks (40%), vegetarian food (34%) and low-sugar, fat or calorie food (32%). One in five (20%) also want vegan food. Whether they will pay for it depends on the setting: Brits would pay a premium of 12.1% for healthier food and drink options in health clubs, but only 6% in a restaurant and 4.5% in a pub or café.

Delivering healthy food as the standard, or for small premiums, won’t be easy. Research published earlier this month by Public Health England showed that hospitality businesses are struggling to meet sugar reduction targets, though some have managed to cut calories in single serve products by more than 20%. More than one in two (57%) businesses surveyed by Barclays said they expect to spend more on “wellness” offers by this time next year.

But the bank urged them to invest now, despite the “balancing act” many operators are performing currently. Last week the UK government announced further restrictions in some areas, but pressure has been growing for a short, sharp national lockdown – a so-called “circuit breaker”.

Hospitality and leisure businesses face uncertainty but this is not a time for companies to delay investment or ignore consumer trends, said the bank’s head of hospitality and leisure Mike Saul. “While difficult in the short-term, firms making the right investments now, such as in health and wellness offerings, have the potential to bounce back stronger,” he said.

Health & Vitality Honours 2021 is now open for entries.

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