Family attractions, restaurants and hospitality businesses are set for a summer boost as a tax cut encourages Britons to spend more on leisure, new research suggests.
A Government VAT reduction aimed at making family days out cheaper is set to drive a surge in summer spending, with millions of households planning to head out more often as they take advantage of the savings.
Research from RSM UK’s Consumer Outlook found that four in 10 families — 41 per cent — expect to enjoy more days out this summer because of the Government’s Great British Summer Savings scheme, which includes a temporary VAT reduction on children’s activities and meals.
The findings will come as welcome news for Britain’s struggling hospitality sector, which has faced rising costs and cautious consumers cutting back on non-essential spending.
The boost appears to be spreading across income groups, with families on tighter budgets also planning to make the most of the savings.
Almost half — 44 per cent — of households earning between £20,000 and £40,000 said they intend to increase family outings this summer.
The figure stands at nearly a third — 29 per cent — among households earning between £40,000 and £80,000, while more than half — 52 per cent — of families with incomes above £80,000 plan to spend more on leisure activities.
The research suggests the tax cut could provide a much-needed lift for attractions, restaurants, cafés and entertainment venues hoping for a stronger summer season.
With families looking for affordable ways to enjoy time together without breaking the bank, businesses across the hospitality industry are hoping the measures translate into increased footfall and higher spending.
The Government’s move is being positioned as a way to put money back into consumers’ pockets while encouraging people to support British leisure businesses.
For hospitality operators, the challenge now is turning the summer boost into a longer-term recovery after years of pressure from inflation, energy costs and changing consumer habits.
Saxon Moseley, head of leisure and hospitality at RSM UK said: “With many households continuing to watch their spending, a VAT cut on family days out could provide a timely boost to hospitality businesses this summer by making leisure activities more affordable.
“That said, the success of the policy will depend on how much of the saving can realistically be passed on to consumers. Restaurants face an uphill task to update systems and re-print menus within a tight timeframe and given it only covers the summer period, some may feel the administrative burden outweighs the benefits. However, leisure operators such as theme parks and cinemas are better placed to update ticket pricing at short notice.
“Our data indicates that for businesses that embrace the changes they could reap the benefits with families looking for value this summer.
“In addition, with the industry calling for the government to go further and permanently cut VAT on hospitality, the temporary measure this summer could be a good trial to demonstrate the wider impact reforms could have.”
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