Hospitality’s contribution to economy outpaces other sectors

The contribution of the hospitality industry to the UK economy has grown faster than any other sector since the 2008 downturn and looks set to create another 500,000 jobs over the next five years.

Hospitality is Britain’s fourth largest employer, accounting for 3.2 million direct jobs and a further 2.8 million indirect jobs, according to research from Ignite Economics commissioned by the British Hospitality Association.

The study says that the jobs are spread around the country, with hospitality ranking as a top-six employer in every region of the UK.

Hospitality’s gross value added (GVA) – the increase in economic value from the production of goods and services – of 5.9% is almost double that of the economy as a whole.

Labour productivity in the sector has grown at more than double the rate of the overall economy since 2008, the figures show. The industry GVA of 3.2% per hour worked compares with 1.5% for the wider economy.

While the sector’s growth outlook remains uncertain, Ignite calculates that in the best case it would create an 518,000 more jobs by 2021 than under a worst-case scenario.

Hospitality and tourism brought £73 billion to the economy last year, or £161 billion including the indirect impact, including £15 billion in exports and £38 billion in direct tax receipts.

BHA chief executive Ufi Ibrahim (pictured) said that the research confirmed “the colossal value of hospitality and tourism to the economy and wellbeing of the country”.

However, it also showed that the growth outlook was “highly uncertain, given the pressures of falling real living standards, the costs of implementing the national living wage, increases in business rates and the potential lack of labour following exit from the EU”.

Ibrahim renewed the association’s call on the government to cut VAT on tourism; allow the Low Pay Commission to set the living wage; and carry out a fundamental review of business rates. The government must also work with the industry to reduce dependence on EU workers and increase the number of UK workers entering hospitality, she said.

“We are fundamental to ensuring the UK remains open for business,” Ibrahim told The Times. “With the right strategic support from government, economic stability and access to labour, we believe that hospitality and tourism can continue to grow and become a career of choice for more people.”

Ed Birkin, founder of Ignite Economics, said: “Labour-intensive industries appear to be out of vogue with the current government, but they provide a key role in job creation, preventing significant socio-economic issues associated with high levels of unemployment.”

bha.org.uk