Hospitality sector to lead economic recovery

The UK hospitality industry could become one of the key building blocks for an economic recovery, according to a new report released today.

The study by Oxford Economics, the forecasting specialist, commissioned by the British Hospitality Association (BHA), says the sector, which employs over 2.4 million people, could generate a further 236,000 jobs over the next five years.

It also found that a further 1.2 million individuals are employed indirectly through the "hospitality economy" — largely through working for companies that provide goods and services to the sector.

Oxford Economics was mandated to undertake the research in a bid to highlight the importance of hospitality — encompassing tourism, hotels, pubs, bars, restaurants, takeaway operators and other leisure segments such as camping grounds and event organisers — to the economic recovery.

Its findings are designed to engender "active and positive partnership" with government as well as setting down the key commitments of the BHA — and its members — to job creation.

Growth prospects​

David Michels, the former Hilton chief executive who is president of the BHA, said the government could not ignore the industry's job creating potential.

He said: "The hospitality economy is one of the country's key industries with huge growth prospects in jobs. Our task now is to work with government, individual companies, other organisations and agencies to ensure that this growth can be achieved."

The BHA said the core "hospitality economy" had an estimated turnover of £90bn and contributed an estimated £34bn in gross tax revenues. The report said that 4.2% of total investment in the UK economy is made by the hospitality economy, helping to sustain 61,000 jobs, with 39,000 of those jobs in construction and related activities.

Key driver​

Ufi Ibrahim, chief executive of the BHA, introducing the report at the House of Commons last night added: "At a time when the government's spending review will tend to lead to redundancies and job losses, the hospitality industry can become one of the key drivers of economic recovery and sustainable growth.

"But achieving this demands an active partnership with government.

"We are seeking a real change from the new government to achieve a strong partnership that benefits members, the wider society and the UK economy in general.

"Global competition in tourism is intense and gets stronger every year. We need to ensure that we can meet this competition through a UK tourism industry which is not over-burdened with regulations and has the right structures and supports in place."

The report also calls for the government to take a look at the impact of VAT on the hotel industry - although it does not mention the restaurant sector.