Barclays latest Hospitality & Leisure Report found 51% of businesses planned to expand over the next three years, while 65% have upped investment in experience-led offerings as consumer demand continues to shift towards memorable activities and events.
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Drawing on data from 73,000 hospitality and leisure businesses, alongside research based on 500 industry leaders and 2,000 consumers, the report suggested operators have adapted business models to capture demand.
Almost four in 10 (39%) were investing to improve the customer experience, while 38% had introduced or expanded loyalty schemes and subscription models.
Barclays said the trend reflected growing desire for experiences in the on-trade, with 60% of respondents finding demand in this space has grown faster than for physical products.
Cost pressures
Operators also hoped to benefit from a busy summer calendar, with 60% expecting sporting, cultural and entertainment events to have a positive impact on trade.
Despite concerns about household finances, consumer demand was also found to be relatively resilient.
More than half (56%) of those surveyed planned to spend the same amount or more on experiences and events this summer, with 66% feeling it improved their wellbeing and happiness.
However, cost pressures have continued to weigh on businesses. Around a third reported higher staffing costs following increases to the National Living Wage and National Insurance contributions, while 31% said they were under pressure to raise prices.
On top of this, 72% of consumers expected tensions in the Middle East to impact the cost of living this year, while 57% of industry leaders have changed their business outlook for 2026 amid geopolitical instability.
High-quality experiences
The report further highlighted a divergence in strategy, with smaller firms building financial resilience as borrowing dropped 12.7% and savings rose 1.9% year-on-year.
Meanwhile, larger operators have increased borrowing and loan volumes, signalling continued confidence in investment and growth.
Barclays head of hospitality & leisure Rich Robinson said: “Hospitality and leisure businesses are showing real resilience as they navigate higher costs and ongoing uncertainty.
“Our research shows many are responding by investing in the customer experience, using technology to build loyalty, and adapting their offering to meet changing expectations.
“While consumers remain selective with their spending, the appetite for memorable, high-quality experiences is clearly holding up. That presents a strong opportunity for businesses that can combine value, personalisation and operational efficiency to stand out and grow.”
