Flexible workers are calling time on traditional hospitality and leisure hours 14 Jun 2018 09:00 • Britain’s bars, restaurants and leisure clubs could make a further £6.75bn per annum by adapting opening hours to changing working patterns • Over a fifth of British workers (22%) are calling for the UK’s food, drink, hotel and gym businesses to change their opening hours • Demand is being fuelled by almost six in ten (57%) British workers who now work extended hours, part-time, flexibly or according to a shift pattern • 19% of British workers expect 24-hour services across the hospitality and leisure sector As the traditional 9-5 working day becomes less and less common, the times at which people want to go to the pub, grab a meal or work out at the gym are changing. A new report from Barclays shows that although over a quarter of hospitality and leisure businesses recognise this growing demand, opening hours are not keeping up with changes to modern working lives. Since our leisure time has shifted, a quarter of workers would now like to go to a museum in the evening (between 6pm-11pm), over one in ten (13%) film fans would choose to go to the cinema in the small hours (11pm-5am), and almost one in five (19%) late-night diners would choose to get a takeaway after closing time (11pm-5am). By responding to these changing demands, the British hospitality sector could benefit from a further £6.75bn1 a year in increased revenue according to research from Barclays. The new Barclays Corporate Banking Hospitality and Leisure report, Open All Hours? finds that only a third (37%) of British workers now work traditional 9-5 hours, with over a fifth of British workers (22%) saying they need different opening hours. The report also finds that a similar number (19%) expect 24-hour hospitality services. By responding to this demand, restaurants (£2.2bn per annum), takeaways (£2.1bn), and pubs, bars and clubs (£1.2bn) could benefit the most. Demographic differences On average, Gen-Z workers (18-24 year olds) is the age group most frustrated that it cannot access hospitality services when it wants. A third (33%) of this ‘on demand’ generation say that they expect 24-hour services, compared to a quarter (25%) of millennials (25-34 year olds) and just 19% of 35-44 year olds. Over a third (34%) of 18-24 year olds explained the reason behind their demand for “out of hours” services as due to long working hours, compared to 30% of millennials (25-34 year olds) and 20% of 45-54 year olds. The takeaway service industry is missing out on a £2.2 billion order Whilst consumer demand isn’t always being met, satisfaction with the availability of hospitality services varies across the sector. As Britain becomes more health conscious, gyms and sports clubs have been quick to adapt, with almost one in five (18%) hospitality and leisure business leaders surveyed already changing their opening hours. Pure Gym is one example of an agile business which has recognised shifting demands and adapted its business model to accommodate this changing dynamic. Pure Gym uses PIN-controlled access systems, smart lighting, temperature controls and extensive video monitoring to overcome the staffing issues that deter some businesses from after-hours opening. This has enabled 20% of Pure Gym’s customers to work out during the night. Takeaway services, on the other hand, have left nearly a third (32%) of workers hungry for more, having been unable to order a takeaway as the business was closed. While digital food delivery services such as Deliveroo, JustEat and Uber Eats, have provided customers and restaurants with an easy to use platform for home delivery, almost a third (32%) have been unable to get a takeaway. This desire to order a takeaway at unusual hours is even higher among young workers (18-24 year olds), with (37%) keen for delivery between 11pm and 5am. This opens up the opportunity for takeaway services to extend their hours, with customers willing to boost the sector by up to £2.2bn. Commenting on the report, Mike Saul, Head of Hospitality & Leisure at Barclays, said: “Adapting to the changing consumer demand presents a substantial opportunity for businesses. Our research has shown that leisure operators could access a staggering £6.75bn per annum by accommodating their customers’ evolving needs which have been brought on by changing working patterns. While that may be a challenge for some providers, understanding the value of the opportunity makes the prize more tangible. “The current leisure environment does present a number of challenges for the sector’s businesses; the labour supply is challenged by Brexit, rent increases and food inflation are all set within the context of an incredibly competitive market which is already heavily discounting. However, those that don’t adapt to this type of newly developing consumer demand risk being left behind and in this ever-competitive environment, businesses need to weigh up the value of the long-term opportunity over the cost of the short-term investment.” What’s holding businesses back? Although the research reveals that seven in ten (69%) businesses surveyed have received requests in the last 12 months to extend their standard opening hours, only one in ten (12%) has adapted to meet changing customer demand. But it’s not as simple as just re-setting the alarm clock. British businesses cite increased overheads (19%) as the most common barrier to opening at different times, with large operators particularly seeing this as a threat (23%). Against a backdrop of looming challenges and fierce competition, businesses that are facing these challenges on a national scale, face an even bigger threat. With all this pressure, changing demand for opening hours may seem like a lower priority for businesses. But in such a competitive market, evolution is crucial in order to stay profitable. There are also a number of solutions that can help businesses extend their opening hours without an overwhelming increase in overheads. Embracing the opportunity There are several options for British hospitality and leisure businesses looking to overcome these challenges. Technology can reduce the need for a 24/7 workforce and make hospitality services more accessible. Recognising this, just under a third (27%) of businesses have invested in new tech in the past year in an effort to appeal to customers in the future. Among gyms, sports clubs and hotels for example, 1 in 5 (19%) workers would be more likely to use a service if it has an automated check-in/check-out procedure. This suggests that people are more inclined to use services if they know they will be available 24/7. For services where pre-booking is necessary, online booking is also an incentive as it allows customers to book 24/7. Over a quarter (28%) say that having the option of an easy to use booking platform would mean they would use hospitality services more often. Receiving notification on their mobile showing services based on their location also makes one in seven (14%) of customers more likely to choose a service. Changing working preferences are adapting how and when we use hospitality services. Customers are looking for both different opening hours as well as continuous access to booking platforms. Although there are barriers to overcome, Barclays research shows there is a £6.75bn opportunity for hospitality businesses that can make the change. Notes to editors The Barclays Corporate Banking Hospitality and Leisure report, Open All Hours? report examines the attitudes of consumers and businesses in the United Kingdom in March 2018. The consumer survey was conducted by YouGov with sample of 2,334 UK workers, weighted to be representative of all UK adults, who were asked about the leisure services they use from restaurants, takeaways, bars and hotels to health clubs, entertainment venues and visitor attractions. 553 businesses in sectors across the UK were also surveyed. The findings of both surveys were then mapped by Development Economics against Office for National Statistics data about household spending. 1 The calculation that British hospitality businesses could benefit from £6.75bn per annum if they adapt their opening hours, is based on consumer responses to the survey which were combined with ONS data from the 2017 Family Expenditure Survey. The responses used were to questions around current usage of and expenditure on leisure facilities, levels of frustrated demand, and willingness to pay for out-of-hours services. This calculation was then broken down a according to region and the type of leisure service. For further information about Barclays Corporate Banking, please visit our website www.barclayscorporate.com About Barclays Barclays is a transatlantic consumer and wholesale bank offering products and services across personal, corporate and investment banking, credit cards and wealth management, with a strong presence in our two home markets of the UK and the US.With over 325 years of history and expertise in banking, Barclays operates in over 40 countries and employs approximately 80,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.home.barclays .