UK smoking ban will dent hospitality sector - CEBR report
LONDON (Thomson Financial) - The upcoming UK smoking ban will dent spending on alcohol and tobacco, weighing heavily on the hospitality sector, according to think-tank, Centre for Economics and Business Research (CEBR).
CEBR said in a report it sees the July ban resulting in a 3 pct drop in spending in the third quarter of the year compared with the same period a year ago before worsening to a near 3.5 decline pct in the fourth quarter.
It argued that the decline will come on top of what has already been a difficult period for the sector.
Jaspreet Sehmi, one of the report’s authors said he expect belts to tighten across the board over the next 18 months as high interest rates, low house price inflation and a weak global economy take effect.
“However, while tobacco and alcohol sales have traditionally been relatively immune to these cyclical effects, we expect the smoking ban to change that on this occasion, and sales to drop,” he added.
Jonathan Said, senior economist at CEBR said some companies in the sector are still not fully prepared.
“Virtually all parts of the hospitality sector are going to be affected to a greater or lesser extent by the forthcoming smoking ban. However, while some companies have made concerted efforts to understand the likely impact and plan around it, others are likely to face a shock come July 1st,” he said.
sivakumar.sithraputhran@thomson.com
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