22 Aug 17 – Hostelworld, Pernod Ricard, credit, exports, nightclubs & other:

A DAY IN THE LIFE:

Parts of Langton are on holiday. Back properly after the Bank Holiday but, for the meantime (and rural internet permitting), the email will go out in shortened form. On to the news:

PUB, RESTAURANT & DRINK PRODUCERS:

Hostelworld saw group bookings grow by 11% in the first half of 2017 to 3.9m bookings, with its core Hostelworld brand up by 21% in the period. Group net revenue grew by 16% to €46.6m (H1 2016: €40.2M) and Adjusted EBITDA increased by 27% to €12.9m, while a 6% increase in interim dividend has been declared. CEO Feargal Mooney commented: ‘The level of growth in H1 2017 was somewhat flattered by a weak comparative in H1 2016, and growth rates in the June to August period have been more modest. Our expectations for the full year outcome are nonetheless unchanged.’

Hostelworld’s Asia markets have been a source of strong growth (18% bookings growth vs. 10% in H1 2016), while bookings from not-paid-for channels was up slightly to 62% of the total and marketing investment as a percentage of net revenue fell from 43% to 41%. More people have been accessing the platform on mobile devices (50% vs. 43% in H1 2016) and the group has launched a new technology development centre in Portugal to further enhance its capabilities.

People are continuing to eat and drink out much as they did last year despite a fall in consumer confidence, per figures from the Coffer Peach Business Tracker. Total sales growth in July among the 37 companies in the Tracker cohort, which includes the likes of Casual Dining Group, Byron, Wagamama and Le Bistrot Pierre, was 3.7%, driven by new openings over the year. Restaurant chains edged ahead of pub groups in performance, showing a collective 0.9% like-for-like growth rate against 0.4% for pub and bar operators.

Experts are predicting that premium and super-premium spirits brands will overtake standard spirits as the latter’s sales continue to fall. Sales of premium spirits are already rising faster than standard with the former up 2.5% compared with the latter’s, which are down 1%. Total spirits sales are up 0.5%, PRUK data showed.

Pernod Ricard UK (PRUK) has launched a tool that allows pubs to use customisable menus in order to offer a more tailored cocktail selection. The Menu Maker was developed in time for Christmas so that pubs might ‘better tap into the £30.1m seasonal cocktail opportunity’, according to PRUK channel director Mark Harris.

Income for the UK’s biggest nightclub operators fell for the fourth year in a row as consumers increasingly turn to bars. Ortus Secured Finance reports that turnover fell 5% over the past year to £325m as bars, which have been opening later since the Licensing Act came into force in 2005, continued to take market share. Struggling nightclubs are also finding it difficult to access the funding they need to revamp premises and attract new customers.

Northern pizzeria brand Buca Di Pizza is the latest operator to announce a site at Hull’s waterside Fruit Market, which is currently being regenerated. Other investments in the Fruit Market include its £300,000 flagship Ambiente Tapas, Butler Whites, and Tapasya @ Marina. This investment in the Fruit Market forms part of an £80 million transformation by Wykeland Group and residential developer Beal Homes, which have formed joint venture company Wykeland Beal in partnership with Hull City Council.

YO! Sushi has reported a 5.5% rise in like-for-like sales in its ‘transformative’ first year under new ownership, per Propel. The group, which saw turnover grow to £88.4m and EBITDA of £10.8m, says ‘2017 will be about taking advantage of significant opportunities that exist for the brand’.

Majestic believes a 400% rise in sales of Eastern European wine since last year and claims this has resulted as consumers look for better value in response to Brexit-related price hikes. The retailer has reported a significant year on year increase in sales of wine from Romania, Bulgaria, Hungary and Slovenia year in the 12 months to April. Eastern Europe has been greatly increasing the quality of its wines through internal and external investment and there was a growing level of expertise, according to Majestic.

The WSTA has called for greater clarity on export agreements with key trading partners post-Brexit, due to the product’s growing importance to the UK economy. The value of UK wine exports grew by 21% between January and July. Wine is now the UK’s sixth highest food and drink export, underlining the country’s importance as a global wine hub, as much of the wines is imported from its country of origin and shipped to the EU, the Far East and beyond, according to the trade body.

HOLIDAYS, LEISURE TRAVEL & HOTEL:

Recent stock market listing Global Ports Holdings saw its first half revenues hit by a slowdown in traffic to ‘higher margin Turkish cruise ports’. Although the cruise port operator saw strong overall cruise passenger number growth in the first half of the year, the unexpected decline — led by ‘cruise lines deciding on short notice to substitute Turkish ports, mainly with Greek island ports, due to a negative perception of Turkey’ — was enough to put Global Ports profits down by 25% to $10.1m.

Figures from the ONS show that the number of overseas business trips made by UK residents declined by 1% during the first six months of the year, from 3.76 million to 3.72 million visits.

Edinburgh airport has begun work on a new £80m extension to its terminal as part of a wider £220m programme of improvements intended to better accommodate its growing passenger numbers. Gordon Dewar, the airport’s CEO, said: ‘This is a major investment for the capital and Scotland and further establishes Edinburgh airport as one of the most innovative and forward thinking airports in the UK. We are Scotland’s busiest airport and the fastest growing airport in the UK – and that demand is only going to grow with the record numbers of passengers we expect to see passing through the terminal.’

The boss of Heathrow has denied it plans to double airport charges following a report in last week’s Sunday Times, whose claims John Holland-Kaye called ‘categorically untrue’ in a letter published in the newspaper over the weekend. The Heathrow CEO added the airport has ‘this year alone cut domestic charges by £10 while reducing the average per passenger charge by 2.3% to £21.92 — not the £40 figure suggested.’

Thomas Cook Airlines faces potential disruption after more than 80% of the airline’s 400 pilots that belong to the British Airline Pilots’ Association voted to strike on Friday. It is understood that pilots are upset about being offered a 1.5% pay rise on top of their automatic increase of 1.8% and are instead demanding a 10.7% increase. Pilots are also demanding they fly in business class when travelling to airports to connect with flights.

OTHER LEISURE:

Three rail franchises in the UK are set to have their services disrupted by a new series of strikes from Friday 1 September to Monday 4 September. The RMT union has called for its members to take industrial action on Southern Railway, Northern and Merseyrail in the long-running row about driver-only-operated trains.

UK consumers are increasingly reliant on plastic. The number of transactions on credit and debit rose by 12% in the year to the end of June — the highest annual rate since 2008, according to UK Finance. The Bank of England has repeatedly warned against consumers becoming too dependent on credit.

New Look targeted by distressed debt investors US distressed debt investors are seeking to acquire bonds of embattled fashion retailer New Look.

Asos and New Look’s chief executives have both warned over working conditions in UK textile factories, where workers are ‘exploited and paid far below minimum wage’. They called the issue a ‘ticking time bomb’ and added that a potential resurgence in the country’s manufacturing industry, amid a concerted push to fortify domestic output amid Brexit, could be halted due to ‘sweatshop’ practices.