The cost of living crisis and staff shortages are set to threaten £1.8bn worth of growth in the East of England's hospitality and leisure sector.

A new study from Barclays Corporate Banking found two in three (67%) hospitality and leisure businesses in the area are confident of growth.

An average 19% rise in revenue is predicted in comparison to pre-pandemic levels, equating to a £1.8bn rise over 2019 and £2.6bn over 2021.

However, growth is now under threat as the cost of living and a staff shortages continue to bite.

%image(14471337, type="article-full", alt="98% of H&L businesses are struggling to recruit, with vacancies for cleaning staff (27%), waiting staff (25%) and delivery staff (20%) causing the most issues")

A number of H&L businesses in the East of England have reported a 42% year-on-year average spike in their utility bills.

Almost all (98%) are struggling to recruit, with vacancies for cleaning staff (27%), waiting staff (25%) and delivery staff (20%) causing the most issues.

In response, operators are establishing new incentives to recruit and retain talent.

A third have reduced working hours, while over a quarter (27%) have made flexible working permanent and introduced bonuses.

Toby Warren, senior policy officer at Suffolk Chamber of Commerce, said: "There does appear to be a slight drop-off to hospitality and leisure spending, presumably to the cost of living crisis.

"And while their busiest time of the year is coming up and businesses do remain confident, there is of course some trepidation about what the next few months could bring.

%image(14468994, type="article-full", alt="Toby Warren from the Suffolk Chamber of Commerce there "some trepidation about what the next few months could bring".")

"We're asking the government to look at the possibility of tax cuts, specifically VAT, because that would encourage people to come out and enjoy themselves despite rising costs."

Mike Saul, head of hospitality and leisure at Barclays Corporate Banking, said: "The hospitality and leisure industry was undoubtedly one of the hardest hit by prolonged periods of lockdown during the pandemic.

"The worsening cost of living crisis is now a serious threat to growth and our research shows that talent shortages are another major concern.

"We hope the new and novel methods that firms in the East of England are deploying to recruit, reward and retain their staff will help them to manage these challenges and ensure strong growth over the summer months."