The hospitality sector has seen the continuation of staff shortages and further price rises through 2022. This meant an uncertain start to 2023 in the eyes of the construction industry, as Esme Hudson investigates.
The UK is still suffering from significant challenges from external factors including complications of the Ukraine war contributing to inflation. This has particularly affected the cost and quality of construction materials imported into the UK, as well as rising energy bills.
As a result, developers are facing slower rates of construction and potential risk of uncompleted projects, however, some extended projects are being permitted to generate future revenue back into the economy.
There are still opportunities in the pipeline though and the Glenigan Construction Industry Forecast 2023-24 concluded the value of detailed planning approvals for indoor leisure projects is expected to translate into a growth area and more construction contracts as work gets underway on new schemes.
Investment in indoor leisure facilities such as sports halls, gyms, cinemas, and family attractions will help to drive a 9% rise in the value of underlying project starts (under £100 million in value) across the overall hotel & leisure sector which Glenigan is forecasting for 2023.
A further 2% rise in total hotel & leisure project starts is pencilled in for 2024. More investment comes as the underlying prospects for indoor leisure businesses have improved as Covid has faded.
According to a report from property agent Avison Young earlier this year, cinema admissions are set to reach 80% of 2019 levels in 2022 whilst theme parks and visitor attractions should benefit from more international visitors. The weaker pound should also boost overseas visitor numbers. Meanwhile, new formats in the sector such as virtual reality and so-called ‘immersive experiences’ are also generating new investment in indoor leisure projects.
Another challenge is that the hospitality sectors, like others within the wider industry, are now obliged to consider more renewable energy elements in their construction planning. The increasingly common use of solar panels and GSHP installations provide companies with alternative remunerative energy options to combat setbacks.
The eco-alternatives prompt companies’ duty of care as they have a social responsibility in halting the effects of global warming. Other environmental considerations companies may take in 2023 include the consideration of cost-reasonable renovation rather than complete reconstruction to reduce their overall carbon footprint.
Construction industries are also taking similar action in the choice of building materials with 55% prioritising the importance of environmental options. The industry hopes that this year there will be a move away from the impact of covid, commencing with the construction of new hospitality sectors that will generate job opportunities for the unemployed.
However, it was recently announced that one third of hospitality businesses are currently in danger of bankruptcy, jeopardising the future of new sectors and their workers.
The public’s demand for post-covid visits to hospitality sectors however is steadily increasing, despite the cost-of-living crisis, yet the increasing revenue is being met with shortages of employees and high cost of produce. If this instability is controlled, this new year could be set for success.
