Consumer Markets

Leisure & Hospitality

Deals Activity: Low

Restructuring Activity: Very high

Pressure on leisure operators intensifies as disposable incomes are squeezed.

Deals activity in Leisure & Hospitality

1. Leisure deal volumes have been relatively steady for the past five years.

2. We anticipate the period of economic distress to result in increased deal activity as operators look to sell non-core brands or sites.

Restructuring activity in Leisure & Hospitality

Leisure & Hospitality

From gyms and cinemas through to hotels, restaurants and casual dining, the sector was one of the worst affected by lockdowns and social distancing rules. Any hope of respite has been dashed by the cost-of-living crisis, serving to increase input costs and place sudden pressure on disposable incomes.

Our view remains that leisure operators with a great customer-led proposition and able to clearly demonstrate consumer value will be best-placed to navigate the volatile economic backdrop.

The sector faces numerous challenges in the coming months:

Increased debt levels

Even with government support, balance sheets have been weakened by the greater debt burden needed to survive the pandemic. As borrowing costs rise, businesses struggling to manage debt refinancing effectively will find themselves in a challenging position.

Liquidity and cost control

Leisure operators need to keep a keen eye on managing day-to-day operational costs and capital expenditure, while ensuring quality levels remain high.

Investment and innovation

Even in a difficult market, investing in new propositions and offerings remains as important as ever. When disposable incomes are tight, consumers are even less likely to accept 'good enough' when parting with hard-earned cash.

Diversification

We anticipate consolidation in the sector as businesses look for ways to benefit from efficiencies and widen out the range of revenue streams.

Giraffe / Ed’s Easy Diner, CVA

Our team implemented a CVA for the restaurant chain, with all voting creditors choosing to approve the CVA, surpassing the 75% total required to pass the resolution.

This was a critical step for the business, allowing them to complete their financial restructuring plan and embark on a comprehensive operational transformation program.

Thomas Cook

Our team were appointed to manage the liquidation of travel agency Thomas Cook following the firm’s failure.

This included the closure of the 555 stores and the sale of airport landing slots.

A sale was agreed for the stores to Hays Travel with the re-opening of stores and many jobs saved.

Find Your Expert

Will Wright leads the Leisure & Hospitality sector team at Interpath, supported by a national team of experts across the country. For a full list of our senior people with experience in this sector use the button below.

Our senior team