LONDON—The launch of the British Hospitality Association’s Hospitality Economy Partnership at the House of Commons on Tuesday outlined extensive research into opportunities for industry expansion to an audience of BHA members and government representatives, including John Penrose, minister of tourism.
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BHA president David Michels (left), BHA chief executive Ufi Ibrahim and British Tourism Minister John Penrose gather at the Hospitality Economy Partnership launch at the House of Commons. |
The Economy Partnership is being seen as a written call for the private sector to form a pragmatic partnership with government in order to drive economic growth. The research, by economic forecasting consultancy Oxford Economics, titled “Economic contribution of UK hospitality industry” prompted the BHA’s “Creating Jobs in Britain--A Hospitality Economy Proposition”, which is being seen as a business proposition for the government.
BHA president Sir David Michels said in his opening address: “The prime minister in August laid down two major objectives for the tourism industry. The first was that Britain should be one of the top five tourism destinations in the world and the second is that we should grow the contribution or the amount of money spent by Britons in Britain on hospitality and tourism from 36% to 50%. In response we commissioned Oxford Economics to do some scenario analysis in terms of the future contribution of the industry to understand if the ambitions laid down by the PM could be achieved”.
Michels said subsequent findings bolster the importance of the industry to the overall economy. Figures reveal that hospitality employs more than 2.4 million people, full and part-time. “It provides jobs that suit the needs of people … and also is directly responsible for an additional 1.2 million jobs through the supply chain. Without hospitality and tourism key parts of the (United Kingdom) would be economically dead”.
Up to 236,000 jobs could be created in the U.K. hospitality industry in the next five years, according to the report. It also maintained the U.K. hospitality economy is currently worth around £19 billion (US$30.1 billion), a significant part of the total £116 billon (US$183.7 billion) tourism industry that generates an estimated £34 billion (US$53.8 billion) in taxes and duties every year.
Michels highlighted further figures: “Overseas visitors spend £16 billion ((US$25.3 billion) a year in the U.K., of which roughly half is earned in our hotels and restaurants. Investment in 2010 alone is worth £8 billion (US$12.7 billion) with a thousand hotels built over the last few years. This extrapolates to a figure of nearly £15 billion (US$23.8 billion). The industry between 1998 and 2010 has grown by 206,000 net jobs. To continue that growth we need to work in partnership with the government and others”.
Tourism challenges
Ufi Ibrahim, who joined the BHA as chief executive in July, talked about the intense competition for tourism faced by the U.K. from emerging economies. She laid out the key points of the BHA partnership proposal based on the research findings.
“The proposition is really framed around three key areas of action. The first is building upon government and hospitality industry—both must have the responsibility to champion the industry,” she said. “From the top levels of government, from the Prime Minister all the way down to local enterprise partnerships … we have to actively support Visit England and others to ensure that the importance of hospitality is not lost in (current government) transformations. We have to ensure that tourism budgets are not lost”.
Ibrahim outlined other calls to action.
“We are also calling for a cross cabinet committee to ensure that at the highest levels of government our industry will be championed,” she said. “The second area is about building a competitive industry in Britain, about minimising regulation, about streamlining, and we want to work very actively with government to achieve this. The third point is about efficiency and transformation in the longer term. We want to embrace sustainability, health and wellness as we move forwards. We don’t want Britain to be left behind, we actually want to lead”.
Ibrahim said the BHA wants to make sure the partnership proposals were “suitable, feasible and achievable”.
“Suitable because they are real solutions for industry, for government and for British economy and society, feasible because we are not asking the government for any money, in fact in many cases we are providing solutions and we are offering input from our own side, and achievable because we have the figures, we have the scenarios analysis that shows us that there is a real possibility to create these 236,000 jobs,” she said.
Hotel-specific points
One of the report’s proposals is the investment in new hotel products and facilities to be stimulated through a change in legislation, making it easier for hotels to operate within a real estate investment trust framework, ultimately meaning more tax breaks.
Other considerations in the report include rethinking the comparatively uncompetitive 20% value-added tax addition on hotel accommodation, restaurant meals and visitor attractions, seeking to ease the tourist VISA process and taking inspiration from the U.S. Immigration Service’s engagement of training teams to ensure U.K. Border Agency staff have “the visitor experience” as part of their essential skills set.
Main points of the proposal:
- improved government relations with the hospitality industry;
- long-term future for tourist boards and more cohesion between the boards across the U.K.;
- Local Enterprise Partnerships (now replacing Regional Development Agencies) to embrace hospitality and tourism as a key pillar of their local economies without losing existing tourism budgets;
- the inauguration of a joint government/BHA study on the impact of VAT (other EU countries have a reduced rate compared to the UK’s 20% on hotels and attractions);
- seeking to minimise the regulatory burden on the sector;
- easing existing visitor visa application procedure;
- investment in new hotel products and facilities within REITs framework;
- training border staff;
- creating a Hospitality Service Academy to tackle long-term unemployment;
- scrap plans to introduce a permanent cap on migration of Tier 2 workers from outside the European Economic Area;
- continue to work to address health and wellbeing;
- making sustainability one of the key priorities; and
- a greater balance of comparison between private and public sector bids for outsourcing of food-service and general-facilities management.