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The leisure risk landscape 2025
Leisure sector businesses are struggling with costs, competition and crime, but are creating resilience through innovation.
Foreword
Expected risks include rising staff and food costs, and cost of living concerns impacting customer numbers and spend. These challenges will come as a surprise to nobody.
Emerging risks are those that are taking up increasing amounts of leisure sector leaders’ time and headspace, and include online reviews and their potential for reputational damage. Anxieties about being left behind by new technology - especially AI - also come into this category.
Hidden risks are those random or not-so-random events that we perhaps don’t think about enough. These include equipment failure and theft and damage to fixtures, fittings and artwork, among others. Good insurance can significantly mitigate the cost of damage from these kinds of events.
Key findings
We surveyed 750 leaders in hotels, restaurants and visitor attractions about the risks they face in the next 12 months and the next three years. Findings were remarkably similar between the two time frames. Key findings from the research include:
Research methodology
OnePoll conducted an online survey for Ecclesiastical Insurance of 750 UK leaders (manager level and up) in UK leisure and hospitality businesses. The sample consisted of 250 interviewees from hotels, 250 from restaurants and 250 from visitor attractions. The fieldwork was carried out in February 2025.
Costs dominate the risk landscape
Leaders in leisure organisations have a lot to think about, from regulatory changes and cybersecurity to the impact of extreme weather. Staff recruitment and retention is a constant concern.
But most of all, sector leaders are concerned by rising costs. Increasing food (87%) and staff costs (81%) were the two top concerns for the sector in the next 12 months and these concerns were consistent across hotels, restaurants and visitor attractions. They were also the top concerns when respondents looked ahead to the next three years.
There’s simply no escaping a tough economy. The third most pressing concern in the next 12 months was the ongoing cost-of-living crisis (76%) and its impact on visitor numbers. In fourth, increasing rent and mortgage costs (75%). Again, these were also primary concerns over the next three years.
None of this comes as a surprise. Days out, nights away and restaurant meals are the types of activities that can quickly fall victim to financial worries. UK consumer confidence has remained subdued so far in 2025 amid fears around tariffs, trade wars and job security. Consumers who are concerned about the future tend to save more and spend less.
These risks have created a pressure to diversify, and many leaders in the sector now have the added responsibility of finding new income streams. Nearly three fifths (59%) of respondents agreed that they are under pressure to explore new business areas, with nearly as many (57%) agreeing that their organisations need to diversify to survive.
Our research suggests that visitor attractions are marginally more concerned by rising costs and the cost of living than either restaurants or hotels. In fact, their apprehension extends across nearly all areas. Visitor attractions feel more concerned than other business types in 20 of our 22 categories.
For example, 92% of visitor attractions are concerned by rising food costs, compared to 86% of restaurants and 84% of hotels. Similarly, 71% of visitor attractions are worried by crime, compared to 60% of restaurants and 58% of hotels.
The differences are often significant, suggesting that while economic uncertainty is impacting the leisure sector as a whole, it’s affecting visitor attractions most of all.
There’s a logic to that. It may be easier for restaurants to diversify, often by providing takeaway services. Hotels may be protected to some extent by more resilient business travel and the types of once-in-a-lifetime events (weddings, anniversaries) that are booked in advance and remain relatively immune to shifting spending priorities.
By contrast, many visitor attractions are dependent on impromptu family days out, which can be an early victim when belts need to be tightened. Families in all economic groups are forecast to see a fall in living standards, according to the Joseph Rowntree Foundation.
Naturally, leaders in visitor attraction businesses are concerned about the impact on ticket sales and visitor spend, and the effects of reduced income on every area of their operations.
Concerns in the next 12 months - comparison
Staff, cybercrime and competition
Many concerns revolve around staff. Perhaps surprisingly, managing staff wellbeing (70%) was considered more of a risk than recruitment and retention (66%) and staff shortages (63%). These factors may be connected, of course. Keeping staff happy goes a long way towards preventing them from looking elsewhere.
These are expected concerns because staffing is a long-standing problem in the sector. Three fifths (60%) of respondents remain concerned about the impact of Brexit, which has reduced the stream of employees from abroad. Hospitality has the highest employee turnover of all UK business sectors, according to the Chartered Institute of Personnel and Development (CIPD), and over a third of hospitality staff are in their first year in the role.
Other unsurprising areas of concern included cyberattacks (56%) and competition from other leisure businesses (69%).
Online reviews weigh on industry leaders
Online reviews were once a minor niggle to businesses in the sector. Today, they’re a major headache. Nearly all of our respondents (94%) consider them either very important or somewhat important to their success. Overall, nearly three quarters of respondents (73%) consider negative customer reviews their top reputational risk.
Google Reviews (82%) and TripAdvisor (81%) are the most influential review platforms, and their impact can be pronounced. Nearly half of businesses (44%) say that negative reviews can damage their reputation, with 41% fearing a loss of potential customers and 36% a fall in customer trust. Bad reviews eat into employee time, damage morale and reduce revenue.
Similarly, nearly two thirds of respondents (62%) worry about a social media backlash or viral incident, both of which might be the result of a clumsy response to a negative review. Health and safety violations (59%) and environmental and sustainability concerns (57%) are also potential reputational headaches.
"We had several complaints and negative reports, we lost revenue and we lost regular customers. The incident also reduced the morale of employees in that branch. It resulted in a significant loss to my organisation and increased workload for employees."
Our research shows that ‘green’ concerns manifest in a number of ways. Well over half (57%) of our businesses are somewhat or very concerned with environmental and sustainability as a reputational risk. Both employees and customers want to be associated with organisations that take sustainability seriously.
But environmental risks are multi-faceted. Leisure businesses may want to do the right thing and many will have a solid business case for doing so, but two thirds (67%) are concerned about the cost of sustainable energy resources like solar panels and heat pumps. In fact, concerns around sustainable energy are the ninth most significant worry overall in the next 12 months.
In addition, almost three in five (59%) are concerned about sustainable food management and over half (51%) worry about extreme weather. Storms and floods were considered far more of a risk for visitor attractions (62%) than restaurants and hotels (46%), likely due to their outdoor settings or locations in remote or coastal areas.
The environment is a growing threat to the sector, playing a part in everything from food costs to reputation management. Extreme weather damages buildings and keeps visitors away. On the upside, a commitment to sustainability can attract new customers, reduce running costs and drive efficiency.
The AI dilemma
According to our survey, a third (33%) of leisure sector businesses are already using AI and 40% plan to in the future. Visitor attractions (43%) are using it significantly more than hotels (30%) and restaurants (26%).
Those using AI already say it helps them increase efficiency (68%), automate processes (54%) and produce marketing materials (44%).
For businesses yet to explore AI, these advantages highlight the potential benefits. However, jumping in without a clear strategy carries risks. AI isn’t a one-size-fits-all solution. Rushing into investing in inappropriate technology or implementing it in a piecemeal way could be as damaging as not investing in it at all.
Like other technologies, AI’s full benefits emerge when the right system is paired with employees who know how to use it. The dilemma for smaller leisure operators in particular is whether the benefits currently justify the necessary investment in time and money.
Accidents, breakdowns and theft are hidden in plain sight
Unexpected risks are not uncommon but they are easy to ignore, if only because they’re difficult to anticipate. When the rising cost of food is apparent in every daily invoice, the possibility of the oven breaking down can seem a much more remote concern.
Nevertheless, when leisure sector leaders are asked to think about equipment failure the risk becomes clear. Large majorities are anxious about the failure of cooking appliances (69%), refrigeration equipment (66%), POS systems (65%) and boilers (60%). Of course, expensive produce that can’t be cooked or kept cold is a financial double blow.
How significant can such a failure be? Well, 13% of our respondents have had to shut due to equipment breakdown in the last year, with over half (55%) of those closing for between two and seven days. A week without revenue is a potentially catastrophic loss for businesses operating on the finest of margins.
Not all businesses have to close, but even offering a more limited service to guests that have travelled to be with you can cause reputational as well as financial damage.
Organisations should check that their insurance cover protects against these eventualities. Leisure insurance from Ecclesiastical can protect against equipment breakdown and loss of revenue due to business interruption.
“The boiler broke during cold weather. Guests couldn’t stay in cold rooms so we had to refund them and offer credit for their next visit.”
Damage and theft
Nearly a third (32%) of respondents have had fine art stolen or damaged, and around a quarter have lost replicas and prints of fine art (24%), antiques (27%) and sculptures (26%).
Guests and visitors are responsible for the majority of these incidents (55%), while over a third (36%) were carried out by unknown members of the public. Over 14% of organisations have had other valuable items stolen in the last 12 months. Computers, crockery, speakers, appliances, glassware and linens are just some examples, suggesting that stealing from leisure operators goes beyond petty theft.
Some of the damage was accidental, but hotels, restaurants and visitor attractions must recognise they are increasingly considered soft targets for vandalism and opportunistic crime. Visitor attractions again seem to be hardest hit, perhaps due to their larger and more dispersed sites. Enhancing security and insurance should be priorities for vulnerable businesses.
“Leisure businesses should seek advice from specialist insurers. We have in-house experts who will support businesses in the sector in creating crime prevention strategies. We can also make sure you have the cover you need to recover quickly if major theft or damage occurs.”
Have any of the following been stolen, accidentally damaged, maliciously damaged/vandalised?
Understanding risks to your business
Section 2
Opportunity from adversity
From rising costs to physical and virtual crime, leisure sector businesses face a wide variety of risks. But in responding to those challenges, our research suggests opportunities for hotels, restaurants and visitor attractions to increase resilience, boost efficiency and create better customer experiences.
Diversify and thrive
Diversification is often seen as a lifeboat in the fight to stay afloat in tough times, but new revenue streams can also create foundations for long-term sustainability.
Nearly a third (32%) of the businesses in our survey have diversified already, with nearly half (49%) planning to in future. Hotels are least likely to have diversified, with just under a quarter (23%) having done so compared to over a third (37%) of restaurants and visitor attractions. This may reflect the fact that many hotels have already squeezed the pips of their potential, routinely offering some mix of fine dining, spas, event hosting and conference facilities alongside standard bed and breakfast.
For restaurants, the obvious diversification is into take-out dining, and many have started working with delivery services like Uber Eats, Just Eat and Deliveroo. Outside catering and pop-up venues are other alternatives. Brand management is one potential challenge with these approaches that restaurants should be aware of – as the customer service and quality of food on arrival can’t be guaranteed and may reflect negatively.
Meanwhile, visitor attractions are expanding their hospitality and retail offerings and might also consider promoting sites as backdrops for business events, weddings or award ceremonies. In some cases, the results could be spectacular.
“We’ve diversified to adapt to changes in market trends. With home delivery and outside catering we tap into new revenue streams that can boost profits.”
Has your organisation diversified its business model during the past 12 months?
Making AI work
If our research is correct, the sector is on the cusp of wholescale AI adoption. Only a quarter of respondents (26%) currently have no plans to invest in AI technology at all.
But many of the 33% who currently use AI may only be scratching the surface of its potential. AI has a wide range of uses in the hospitality and leisure sector, if businesses choose the right technology for their needs and train staff to make the most of it.
AI-powered chatbots and personal assistants can automate bookings and answer basic customer queries, freeing up staff for other tasks. Automated check-in is becoming commonplace. Analytics powered by powerful AI algorithms can personalise and improve guest experiences.
AI can even make for smarter, more energy efficient buildings, helping businesses reduce costs and meet sustainability targets.
Like other technologies, AI’s full benefits emerge when the right system is paired with employees who know how to use it. The dilemma for smaller leisure operators in particular is whether the benefits currently justify the necessary investment in time and money.
Staying on top of online reviews
As we’ve seen, nearly every business in the sector regards online reviews as important. At the same time, only three in five (58%) say they respond promptly to all reviews or monitor review platforms regularly. Restaurants lag behind hotels and visitor attractions, with only half (50%) responding quickly to a negative Google or TripAdvisor review.
Despite that, many respondents are already doing the right thing when it comes to online reviews. Just over half (52%) offer resolutions to dissatisfied customers, while around the same number (51%) implement feedback to improve services. Some businesses (29%) ask customers to update reviews after a complaint has been resolved.
But that leaves a large number who aren’t doing anything or aren’t doing enough. An ignored online complaint can spiral out of control. Dissatisfied customers may post repeatedly to point out that no action has been taken. In serious cases, bad reviews can take on a life of their own, encouraging others to join the conversation.
Monitoring and responding to reviews can be time-consuming (although here, too, AI can help), but engaging with customers and acting on feedback can draw the sting of online complaints and help to ensure that mistakes don’t happen twice. In fact, prompt and decisive action can turn angry reviewers into passionate advocates for your business. Most people understand that perfection is impossible, but they do want their issues to be taken seriously.
Of course, not all negative reviews are justified, and 17% of our respondents have taken legal action against false reviews.
How does your organisation manage negative online reviews?
Conclusion
These are tough times for the leisure industry, and our research makes that clear. Costs are rising and consumers are cautious. When you’re fighting for every pound, a negative review or a broken fridge can seem catastrophic. On some days the fight can feel unwinnable.
But this is not a moment for fatalism, and in general our research respondents recognise the need to create more resilient and sustainable businesses. There is plenty of hope here, and a lot of innovation. They understand that diversification can protect income streams and technology can promote efficiency. Many realise that engaging with online reviews and acting on criticism is an essential ingredient of modern customer relations.
They also understand that theft and damage are a growing issue for the sector and that criminality goes beyond petty theft. Against this backdrop, business leaders need to be sure that security is up to scratch, and their insurance policy provides the cover they need.
Respondents’ concerns for the next 12 months are remarkably similar to their concerns for the next three years. Perhaps, since Covid, the sector has become used to economic shocks and resigned to more of the same. The good news is that half a decade of overlapping crises has bred real resilience and an openness to innovation. The leisure and hospitality industry has faced considerable challenges, but it continues to push forward with strength and creativity.