October 12, 2010
- and contributes £34bn in gross tax revenue
The UK hospitality industry directly employs 2.4m people and a further 1.2m indirectly.
These are the main findings of a report commissioned by the British Hospitality Association and prepared by Oxford Economics to highlight the economic contribution of the hospitality industry to the UK economy.
At the launch of the report in the House of Commons today, Sir David Michels, BHA’s president, said that the report emphasised the economic importance of the hospitality industry to the UK economy.
“It highlights the industry’s job-creating potential which the government cannot ignore.
“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.”
Designed to bring together key facts about the industry, the Oxford Economics report shows:
* Hospitality industry employment is much higher than previously believed, making it the country’s fifth largest industry in job terms, employing over 2.4m people (1 in 13 of total jobs).
* It employs a further 1.2m additional jobs through indirect (supply chain) and induced (direct and indirect employee-spend related) employment.
* There are an estimated 400,000 jobs in hotels and related services; 1.26m jobs in restaurants, 750,000 contract catering and in-house catering jobs; and 20,000 jobs in event management – all figures include an estimate of temporary agency employment.
* The core hospitality economy (defined as hotels,, restaurants and related services, catering and event management) has an estimated turnover of £90bn and is worth £46bn to the UK economy in GVA (wage and profits), contributing an estimated £34bn in gross tax revenues.
* Estimates of exports, or attributable in-bound spending for the industry, account for £7.4bn of foreign exchange export earnings (1.8 per cent of total export earnings).
* On average, 4.2 per cent of total investment in the UK economy is made by the hospitality economy, helping to sustain 61,000 jobs, with 39,000 of these jobs in construction and related activities.
The report provides an analysis of the future contribution of the hospitality economy under a range of different assumptions – a trend scenario; a 50:50 scenario which was proposed by David Cameron, the prime minister, in his speech on tourism, implying that there is equal spend by UK residents at home and abroad; and a midway scenario between the two.
Under the trend scenario, the hospitality economy is forecast to grow to 2.66m direct jobs by 2015 (236,000 net additional jobs compared to today). In other words, if pre-recession trends continue, there will be strong employment growth for the hospitality economy across the majority of UK regions.
In the 50:50 scenario, the hospitality economy is forecast to grow to 2.86m direct jobs by 2015 (414,000 net additional jobs compared to today and 200,000 more than in the trend scenario). The report says that a ‘Midway’ scenario has a significantly higher likelihood of being realised than the 50:50 scenario. In this, the contribution of the hospitality economy rises to 2.76m jobs by 2015 and 3.09m by 2020.
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Editor’s note: The British Hospitality Association is the national trade association of the hotel, catering and leisure industry, representing more than 40,000 establishments with over 340,000 rooms and employing over 500,000 people.