Enough of the gloom and doom – it’s actually a Brexit boom! While some sectors of the economy will definitely have suffered during the month following Brexit, the London Leisure & Hospitality sector is actually enjoying a mini boom. As reported in Propel on 1 August, the month of July saw boom conditions across London, with many operators reporting sharp increases in their business. Tourists have rushed to London to take advantage of a drop in the value of the pound, which at one point dropped 13% against the Euro. Against the dollar too, the pound has been at its cheapest for over 30 years. Such conditions have conspired to make London THE bargain destination in Europe. Despite this mini boom, most Leisure operators are pessimistic about trading conditions, with only 15% reporting that they are upbeat about prospects over the next six months. Maybe they will revise their opinion.
The influence of tourism
These boom conditions have been bolstered by the “staycation” factor, with many British people put off travelling overseas because of the weakness of the pound. Bernard Donoghue, Chairman of the Tourism Alliance, estimates that Leisure business has been boosted in July as a result of higher numbers of visitors – calculating that foreign visitors are up 18% and British visitors are up by a factor of 11% year on year. This evidence has been corroborated by letting and travel operators. Airbnb have quoted an uplift of 24% for their July bookings and travel operator Opodo has quoted an increase of 42% for inbound travel to London in July, with Denmark, Norway, Latvia and Estonia leading the charge.
It is hard to believe that these boom conditions are going to come to an abrupt end. London is a year-round destination, so the probability is that London Leisure operators will continue to experience buoyant levels of trade over the late summer and autumn.
Leisure clients and Brexit
Our Leisure clients are reporting a similar pattern of trade. Both Darwin & Wallace and Camm & Hooper are trading well ahead of their budgets, and future business looks underpinned by a high level of forward bookings. Prime Leisure property in Central London is also experiencing very high levels of demand, with premiums at record levels.
Growth in the London Leisure market continues unabated and this is matched by continuing high levels of interest in our Leisure investment opportunities. Our clients have a record number of branch openings scheduled for this autumn in locations ranging from the City to Hackney, Soho and South Kensington. Further evidence, as if it was needed, of the enduring attraction of the London Leisure & Hospitality sector.