Business ‘far from usual’ in leisure and hospitality

Post-Covid recovery is far from complete for companies in the leisure and hospitality sectors, as they struggle with a wide array of strategic risks in the aftermath of the pandemic. Around half the US$300m+ firms polled by WTW as part of its inaugural Global Leisure and Hospitality Risk Outlook 2023 report are still some way from business as usual.

Many of the hotels, health facilities, venues and attractions, bars and clubs, restaurants and other leisure and hospitality companies surveyed by WTW appear to be grappling with matters of risk and risk transfer as 44% say risk-related losses were higher or much higher than expected over the previous two years; and just 28% say the root causes of the risks they face are “within their control”.

“Companies in the leisure and hospitality sector are still feeling the effects of successive global shocks and changing consumer behaviours,” said Garret Gaughan, head of direct and facultative at WTW. “69% of our survey respondents believe that they don’t have access to the right insurance and risk transfer solutions and 56% lack the right risk management tools and insight."

WTW's survey was conducted late in 2022 amongst more than 600 CEOs and heads of risk, operations, or compliance at leisure and hospitality companies world-wide with revenues in excess of US$300m.

Report highlights (Source: WTW Global Leisure and Hospitality Risk Outlook 2023)

• Almost three-quarters of respondents to WTW’s survey say they lack the data or knowledge to address risk; and 59% measure and monitor their reputation and 46% think reputational risk insurance is necessary (22% say it’s mission critical).

• Some 52% say their insurance covers damage to property only, but not the cost of business interruption if they are forced to close.

• 47% observe a skills gap following an employee exodus from the sector.

• 46% feel a pinch from the shift to home-based leisure activities.

• 46% are now more focused on improved margins over the next two years than sales growth -- the priority for just a third.

• 52% say increased competition from outside the sector is one of the greatest obstacles to their strategic objectives.

• 70% say the accelerated switch to digital is the greatest long-term legacy of Covid-19.

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