Like any industry, the hospitality industry has its ups and downs but we underestimate its importance to our economy at our peril. Recent statistics showed that, by the end of 2018, the sector turned over £100 billion, showing a steady growth of 6% over the last five years (source: The Drinks Business). We all know the importance of our favourite restaurants and bars – and their importance and continuing survival is much greater to UK plc.
We are going to look at the importance of the hospitality industry to the economy and how it is essential that it continues to grow to maintain a steady wider economy here in the UK.
Hospitality has always been a key factor in boosting the UK’s economy. The money we spend with hospitality businesses, whether it is the thousands of us as tourists taking residence in hotels and B&B’s for major cultural and sporting events or our hitting the pubs as soon as the sun shines upon the land, creates millions of jobs.
Over the years, the industry has had to cope with a lot of changes. Many towns seen an increased in pub closures, with 17 pubs a week being shut down by the end of 2017 (source: CAMRA), and there was a downturn in visitors hitting our UK seaside towns. It led to a lot of small hospitality businesses having to shut their doors.
Now, with people watching their money and starting to spend local, it has created a positive shift back in the favour of the hospitality sector. We enjoy and appreciate our local produce much more than before and the variety of hospitality choices on offer close to where we live. This increasing trend towards localism keeps money in the regional economy and, over time, the regional economy reinvests the money it has taken from customers into business growth and diversification.
As the industry has grown, we as consumers have grown with it. Over the years, there has been increased customer demand which supports the opening of new hospitality businesses in our local towns and cities.
For example, the increase in coffee shops opening in the UK. The BBC states that, by the end of 2017, there were more than 22,000 coffee houses up and down the UK. This includes the major chains such as Starbucks and Costa with the number of branded outlets doubling in branch numbers in 10 years. This is an astonishing figure and it is clear that, as the public demands more places to eat and drink, businesses have started to supply.
Consumers spend an average of 22% of their weekly budget on leisure and hospitality. That is a significant proportion considering that we spend less than half on housing each week. With this sustained level of customer expenditure in our sector, we can be assured that, if the regulatory environment is right, more and more opportunities to innovate and to grow will appear to our hospitality entrepreneurs.
There is no denying that those in hospitality are concerned about how Brexit will affect the industry. In 2018, the number of staff working in our sector feel for the first time since 2009 (source: The Caterer). Yet with figures showing an increase in the growth to the UK economy through the hospitality sector, it is hard to predict what the future will hold for the industry.
Research by The Drinks Business states that the uncertainty of our current economic climate over the past couple of years saw the profits of the UK’s top 100 restaurant groups fall by a collective of 65%. The research also saw that 1 in 5 hospitality managers state that recruitment is becoming harder for roles within their business.
It is vital that as both consumers and business owners we prevent more closures to help sustain such a valuable industry to the UK.
There is no hiding that no matter what happens in the UK, the hospitality sector will continue to fight and grow. If you are looking to take your first steps in hospitality, or looking to expand your business, we can help. To get in touch you can call us on 0844 800 6011 or at firstname.lastname@example.org.