A sunny June day in Grosvenor Square, central London, saw veterans of the UK hospitality industry flock to the annual UKHospitality Summer Conference 2023 at the JW Marriott.
Wednesday, 14 June was a day of networking and insightful sessions. Founded in 2019, UKHospitality is an industry body representing more than 700 hospitality companies from small independents to multinational operations. It works to lobby the government on legislation, promote the sector and support its members with commercial advice.
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The conference provided a discussion forum for the wide-ranging challenges that the sector has struggled through in the past and must face in its future, as it continues to recover from the pandemic but heads into a cost-of-living crisis.
If one message was to be taken from the conference, it was that the UK hospitality sector is a force to be reckoned with and must not be underestimated by the government and general public alike.
A report by UKHospitality, in collaboration with Ignite Economics, shows that in the past six years, hospitality has increased its annual economic contribution by £20bn to £140bn. Employment in the sector has risen to 3.5 million, making hospitality the third largest employer in the UK.
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The view was widespread that while job seekers can view the sector as a stopgap, only intended for part-time work and not for serious careers, the UK government refuses to budge on “unfair” business rates and is only just starting to pay attention to the industry’s economic contribution.
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By GlobalDataThe political view of the UK hospitality sector
In her opening remarks, UKHospitality chief executive Kate Nicholls asserted that hospitality “should be seen as an industry that is capable of delivering growth going forward, rather than one that is needing to be on continuous life support.
“£140bn means we are bigger than aerospace, automotive and pharmaceuticals put together. If you want to get the economy moving, you need to support hospitality, because we are the ones that are generating that growth and funding those vital public services.”
There was much talk of the next UK general election – scheduled to take by January 2025 at the latest – and how this could affect the sector.
Nicholls called for the government to take three actions:
- To get inflation under control, bring down prices and make the UK hospitality sector internationally competitive
- To address labour shortages, since a third of hospitality businesses are currently restricting their occupancy, capacity, and hours of trading due to insufficient staff to meet demand. The vacancy rate across the sector stands at 10%
- To produce an updated regulatory framework to unlock investment and deliver an additional revenue of £29bn by 2027
Putting the case for the Labour opposition party’s support of hospitality, current shadow Secretary of State for Business, Energy and Industrial Strategy John Reynolds addressed their plans should they form a future government.
He thanked the attendees for their resilience in facing sector-wide challenges, recognising that hospitality constitutes 3% of Britain’s economic output and employs millions of people.
“Too often,” Reynolds said, “politicians can be guilty of promoting the economy as [if it means putting on] hard hats and [building] cars and highways and new tech. But innovation and inspiration can be found on the high street and that’s why Labour respects and appreciates what we call the everyday economy.”
Reynolds announced that Labour intends to bring back the Industrial Strategy Council on a statutory footing, reform the apprenticeship levy to provide flexibility to hospitality businesses and review the business tax and rates regimes.
But of course, no matter how many promises politicians make, the hospitality sector relies on the general public to create revenue.
The public view of the UK hospitality sector
Nicholls reassured hospitality professionals that the sector’s outlook isn’t entirely negative, thanks to consumer spending. She stated: “The latest data we’ve got shows that four out of 10 customers will prioritise eating and drinking out and socialising with friends if they have any disposable income.”
She also pointed out that domestic tourism has remained strong, asserting that 85% of consumers are looking for “staycations”.
While consumers appear consistent in their support of the sector, there remains a labour shortage. This is exacerbated by a widespread stereotype that the sector is only fit for employing students and those not serious about their careers – a major challenge for businesses to overcome in their recruitment practices.
To address this, Nicholls stated that UKHospitality is working with the Department of Work and Pensions and the Manchester Hotel Association to create work experience models and skills “boot camps” to attract job applicants.
UKHospitality Chair and Parkdean Resorts CEO Steve Richards also highlighted his efforts in building a “revolutionary” framework under the Hospitality Skills Council to “make it easy for school leavers, or anybody coming into our sector, to understand the layers of training and accreditation, and even degree level entries into hospitality.”
Shadow Secretary Jonathan Reynolds also addressed the “unserious” stereotype clouding the sector as well. He recounted that his first job was in hospitality, and “that the experience of dealing with customers and working in a fast, changeable, sometimes stressful environment was, for me, transformational. I don’t think I’d be here doing this now if I hadn’t had that job.”
As the conference ended, it was clear that the UK hospitality sector is not responding passively to the issues affecting it, and that the government and general public would do well to recognise and engage with the sector’s value.
As summed up by Jonathan Reynolds, hospitality “isn’t just businesses. What you offer is so much more. It’s dinner with an old friend, some vital coffee on the way to the station, a weekend away with your other half. And the services you provide are important for our nation’s happiness.”
