18/04/2017
Click here to download the UK Leisure Sector - Q1 2017 summary
Summary
Q1 2017 has bought the triggering of Article 50 and the official start of the process leading to the UK exit from the European Union.
Figures for staycations last year were recorded at a record figure contributing £45.3 billion to the economy with day trips also increasing to an all time high since 2012 at 1.35 million. The likely primary cause is the comparatively poor exchange rate with the Euro or USD, resulting in outward travel becoming costly and hence unappealing.
Owing to weak sterling, transactionally the hotel market has shown a trend of international investors purchasing UK Regional hotels, including the private equity firm Queensgate Investments acquiring Generator Hotels for £395m and Fairtree Capital purchasing three of the Duchy Hotel Group's coastal sites in Torbay for £12.5m.
The restaurant market has shown a degree of increased turnover on previous years at casual dining chains such as Wahaca with an increase of £10m and Brasserie Bar Co at £4m. Brands which are seeing minimal or no improvement are looking into loss making units with restructuring and slowing expansion such as The Restaurant Group identifying £10m of costs to be saved. The only company stating 'Brexit' as the reason for suppressed sales and the closure of certain sites is Jamie Oliver's brand; is this a sign of things to come, an anomaly, or highlighting that businesses may have to adapt?
There seems to be a surge in support from pub companies towards tenants and leasees with Ei Group launching digital tools to aid with training and giving advice. Stars Pubs and Bars will be providing its licensees with the SIBA's Beerflex Scheme to Cask Marque accredited pubs. The tied sites will be able to follow customer trends of selling a local range of ales.
Festive sales were positive with companies reporting record trading levels including Stonegate, Oakman Inns and Casual Dining Group. Pub and restaurant sales within January on a like for like basis in comparison to January 2016, have continued to be positive with casual dining chains leading the way at 3.3% and public house group sales at 1% growth.
Clearly there are many positives to reflect on in the first 2017 quarter, let's hope the next quarter continues in the same vein.
UK Leisure Sector Q1 2017 Highlights
January 2017 -
Leisure: Staycations caused a boost of £45.3 billion to the economy in 2016 compared to the highest figure of £44.3billion in 2012, due to increased spending on day trips to 1.35 billion.
Hotels: Radissons Park Inn Portfolio of six sites are on the open market for over £50m. Locations include Telford, Birmingham, Nottingham, Bedford, Harlow and Cardiff, totalling 865 keys.
Leisure: An increase in North American visitors reported up 6.8% compared to the same period of July - October 2015.
Restaurants: Jamie's Italian Restaurants will close six sites with the cause stated to be poor trading since the result of the referendum. These sites include Tunbridge Wells, Exeter, Cheltenham, Aberdeen, Richmond and Ludgate Hill in London.
Restaurants: Ottolenghi has increased turnover to in excess of £16m in the year ending March 2016 compared to 2015 at over £14m. The reason cited is due to the new opening of the site in Spitalfields in London.
Restaurants: Casual Dining Group has reported an exceptional Christmas trade with a £299m annual turnover, an increase of 29% on the previous year. Reasons include the purchase of Las Iguanas, new sites and refurbishment of 50 sites.
Pubs: Stonegate also reported a strong Christmas trade with an increase in like for like sales during the period of 5th December to 1st January up 5.7%.
Pubs: Oakman Inns continue grow with turnover increasing by 52.8% and EBITDA doubling. Christmas trade, like for like sales, increased by 6.7%.
February 2017 -
Restaurants: Turnover of Bill's Restaurants increased 20.5% for the year ended July 2016 due to an increase of nine sites acquired.
Pubs: Emerald Investment Partners confirmed they would not be making a further offer for the acquisition of Punch Taverns.
Pubs: Reported £7m invested in 43 Punch Taverns community sites over a 3 month period. Falcon sites of which 22 have been launched, offers a 5 year retail contract to self employed entrepreneurs.
March 2017 -
Hotels: Generator Hostels purchased by Queensgate Investments, a private equity real estate fund manager, for £450m. Hostels in locations such as Paris, Copenhagen and London totalling 8,639 keys and revenue in excess of £70m.
Hotels: Three sites have been sold from the Duchy Hotel Group for £12.5m to Fairtree Capital, including The Queen's Head and The Palace Hotel in Paignton and The Headland Hotel in Torquay with over 200 keys.
Restaurants: Wagamama sites averaging £41,800 per week. Record sales week with turnover at £6.2m across the company in the week ending 1stJanuary 2017.
Restaurants: The Restaurant Group will be implementing cost savings of £10m by 2019. It will be analysing key brands whilst growing presence in pub sector.
Pubs: The Competition and Markets Authority continues to investigate Heineken's purchase of Punch Taverns with a deadline extension to 29th May 2017.
Contact Details:
Elysia Wilson-Gunn
Associate
T: 020 7280 4747
M: 07810 541 579
E: elysia.wilson-gunn@fleurets.com
Graeme Bunn
Managing Director
T: 020 7280 4740
M: 07776 208085
E: graeme.bunn@fleurets.com