The October survey also found business rates the most pressing issue, with 57% of leaders very concerned and 67% saying their businesses would be less stable if relief were removed.

However, those concerns may have been eased by the decision of Chancellor Jeremy Hunt to extend for another year the 75% business rates discount for retail, hospitality and leisure firms when he made his Autumn Statement yesterday (November 22nd).

The survey found 49% of business leaders now feel confident about the hospitality market over the next 12 months—up by four percentage points from August’s figure of 45%. The proportion of leaders who feel optimistic about prospects for their business in the next year is unchanged at 62%.

The survey indicates important improvements in businesses that have been left ‘fragile’ by Covid and inflation. Only 5% of those surveyed say their business is currently at risk of failure—down from 11% last quarter. The number feeling pessimistic about the market has dropped from 31% in August to 18% in October.

Leaders are upbeat about prospects for the crucial final quarter of the year, with 58% optimistic about Christmas trading, while just 8% feel pessimistic. Well over a quarter (29%) say Christmas bookings are ahead of this time last year—twice the number (15%) who say reservations are down.

Well over a third (38%) expressed concern over increases in the National Living Wage, which the Chancellor announced yesterday would rise in April 2024 to £11.44 an hour from £10.42. The new rate will apply to 21 and 22-year-old workers for the first time, rather than just those 23 and over.

Karl Chessell, a director with CGA by NIQ, said: “These figures are another vote of confidence in hospitality and a sign that trading conditions may start to ease as inflation comes down.

“It’s encouraging to see good levels of optimism about Christmas sales, which can make or break the year for many restaurant, pub and bar groups. Despite pressure on their spending, consumers clearly remain eager to enjoy the special experiences that hospitality provides.

“However, the sector is not out of the woods yet. Costs in food, drink, labour and energy remain exceptionally high, and as the Autumn Statement approaches there is real concern about the damage that a rise in business rates would cause. Hospitality is a vibrant industry that makes an enormous contribution to the UK economy, but any changes to rates relief and caps would jeopardise its investment and job creation and further fuel inflation.”