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Hospitality can lead the economy to recovery – if government helps remove the obstacles

Hospitality can lead the economy to recovery – if  government helps remove the obstacles
4 min read

You really couldn’t make it up: hit first and hit hardest by Covid, the hospitality industry should be well into its recovery stride by now, but instead finds the road to post-pandemic profitability strewn with obstacles – most financial, many unexpected.

Rather than throw in the towel, and armed with gallows humour, the resilient, innovative, and creative hospitality sector battles on in the face of seemingly insurmountable odds.

Name me another industry with this lot stacked against it: rising raw goods prices, soaring energy bills, huge accumulated debt, rent increases, unfair business rates, VAT back to 20 per cent from 12.5 per cent, and higher wage bills due to a 170,000 jobs shortage. Add waning consumer confidence, caused by the cost of living crisis, and a war in Europe affecting fish, wheat and sunflower oil supplies, and that route to recovery appears unnavigable.

Yet hospitality is undoubtedly the industry best placed to lead the United Kingdom out of its current economic malaise. Pre-pandemic, our sector created £130bn in economic activity and generated £39bn of tax for the Exchequer, funding vital public services; and was the third largest private sector employer in the UK, representing 10 per cent of employment, six per cent of businesses and five per cent of Gross Domestic Product. We’re confident that with the right support measures in place, hospitality businesses will bounce back stronger, delivering growth and investment once more.

Levelling up the hospitality workforce will help to level up the nation

Not only that, hospitality is perfectly positioned to support the need to bring prosperity to all regions and ambition to improve social mobility. Indeed, UKHospitality has just published two strategy papers: “Level up hospitality – level up society,” which sets out our industry’s unique position to deliver growth and unlock opportunity in every local community – and “Fixing the crisis: a framework for collaborative action across the sector,” examining all aspects of the sector’s labour needs including recruitment, skills and training, people’s working lives, hospitality’s image as a sector in which to work, and the infrastructure needed to support our employees.

In the foreword to the latter, I noted: “A booming hospitality workforce will create a fantastic hospitality experience for all, and a better society. It’s crucial we work collaboratively to deliver on this workforce strategy. It will create economic growth and help to regenerate communities in all parts of the country. Higher employment rates and business levels will generate even further taxation from hospitality to fund and bolster local and national public services. It will also contribute to the UK being a leading tourist destination.”

I mention elsewhere that at the core of the workforce strategy is “an ambition to upskill our workforce and create high-quality, high-skilled roles, promoting social mobility. Levelling up the hospitality workforce will help to level up the nation”.

To achieve this, UKHospitality is already working closely with government, in particular the Department for Work and Pensions and the Department for Business, Energy and Industrial Strategy, and will support local authorities in their efforts to deliver levelling up through the regeneration of high streets and the reignition of local economies.

Far from bemoaning the rather sorry state it finds itself in, hospitality is determined not only to fight its own way back to pre-pandemic levels of success and profitability, but to take the rest of the UK economy along for the ride.

While the government’s recent announcement of a £15bn package to ease the cost of living crisis is a welcome signal that it’s targeting inflation, we now need a commensurate focus on cutting the costs of doing businesses, to reduce further consumer price rises.

By identifying and accelerating policies that will cut costs, minimise red tape and boost growth, and reiterating its commitment to cut business taxes to incentivise investment in high streets, people and innovation, the government would also help settle the sector’s nerves. 

Until then, resilient to the last, hospitality will do its best to swerve the obstacles to recovery. 

 

Kate Nicholls is chief executive of UKHospitality

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