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Hospitality hit by recession
The recession is having a direct impact on the hospitality and holiday market according to a recent report published by Mintel.
The British Lifestyles survey found that two-thirds of the 2,000 people interviewed now spend less on restaurant meals, while one third have held back from booking their main holiday in the next six months.
People are also choosing to stay at home to drink in a bid to save money, with only one quarter saying they had cut back on buying alcohol to consume at home compared with more than half (59 per cent) cutting back on drinking at the pub.
As pub and bar meals represent the largest market within the eating out sector, food sales could be hit by this preference to drink at home. However, the amount of money spent on meals outside of the home, including takeaways, has remained unchanged since 2007, representing 50p of every £1 spent on food.
The current economic climate is also preventing 35 per cent of those interviewed from booking a main/family holiday, in contrast with the 61 per cent increase in spending in this area over the past decade.
The domestic holiday market, which now represents 16 per cent of holiday spending, may reap the benefits of this downturn in overseas breaks, as people aim to save money by vacationing closer to home.
James McCoy, head of consumer research at Mintel, said: "Three in ten adults have cut back on their spending not because they have to, but mainly through fear of how the recession might affect them.
"The challenge for manufacturers and retailers is to overcome this fear and make consumers feel safe about spending again."