UKHospitality welcomes new Government ‘Hospitality Strategy’

UKHospitality has welcomed the UK Government’s new strategy entitled ‘Hospitality Strategy: Re-opening, Recovery, Resilience’ (that you can download below) intended by the Government to support the reopening and recovery of the hospitality sector and ensure it “is well placed to reach its full potential and contribute to the UK government’s ambitious overall plans for growth, levelling up and environmental sustainability”.

UKHospitality’s press release (published yesterday 16 July 2021) states:

UKHospitality has warmly welcomed the launch of a new Hospitality Strategy as recognition of the unique and valuable contribution the sector’s pubs, restaurants, hotels, nightclubs and other venues make to the UK’s economic and social wellbeing.

The new strategy, which aims to ensure these pandemic-hit businesses can thrive in the long-term and adapt to consumer demands, has been launched by Business Minister Paul Scully today. It focuses on the ‘Three Rs’ of reopening, recovery and resilience.

Hospitality has been the hardest hit during the crisis, suffering the permanent closure of nearly 10,000 licensed premises and losing more than £87bn in sales, leaving businesses deeply in debt and at risk of a long road to recovery.

The Hospitality Strategy includes measures to help the sector build back better and greener from the pandemic, including a potential new T Level to boost skills in the sector, bringing businesses together with universities to boost innovation, and reducing waste and plastic consumption.

UKHospitality Chief Executive Kate Nicholls said:

“The pandemic has devastated the hospitality sector and businesses are desperate to bounce back strongly and return to profitable trading. That’s why the launch of this new Hospitality Strategy is so important – it offers a strong platform to deliver the supportive regulatory and trading environment we need to recover, rebuild resilience and thrive.

Building and training our workforce is a top priority if hospitality is to quickly revive and drive a national recovery, so it’s incredibly positive that a key part of this strategy is focused on addressing the current recruitment challenges and raising the profile of long-term sector careers.

On the focus on carbon reduction, significant work is already ongoing in terms of leading the sector to a net zero future, so measures that will help support the industry’s roadmap are welcome. Ultimately, this strategy sets out a positive vision for the future of hospitality and how a thriving sector can help regenerate high streets and tourism destinations across every part of the country. We look forward to working closely with Government to deliver a plan of action.”

The Executive Summary to the Strategy states as follows:

Executive Summary

The UK hospitality3 sector is comprised of approximately 143,000 businesses , employs around 1.8 million people5 and, in 2019, generated £40.4 billion in Gross Value Added. As well as providing jobs and contributing to the economy, hospitality plays a vital role at the heart of communities up and down the country, giving a welcoming space for people to come together.

Challenges facing the sector

Though many hospitality businesses were thriving and expanding before the COVID-19 pandemic, the sector faced some underlying challenges. Growth was fuelled by an influx of investment, but against a backdrop of a general decline in high street footfall. Businesses tended to operate on very small margins and with low cash holdings, partly due to a high level of fixed costs. As a result, hospitality businesses were, and remain, more vulnerable to income disruption than other parts of the UK economy.

The impact of the COVID-19 pandemic

The nature of COVID-19, and the measures needed to reduce transmission, has invariably had a disproportionate impact on businesses that exist to support social interactions. Despite £352bn in government support, much of it targeted at hospitality, leisure and retail businesses, hospitality businesses operated at a loss and some, for example nightclubs, were unable to operate at all. Targeted support included grants, business rates relief, a VAT cut and the Eat Out To Help Out scheme, along with cutting red tape to make it easier for hospitality businesses to operate outdoors.

Opportunities for the hospitality sector

While structural issues and the unprecedented circumstances posed by the pandemic left the sector facing many challenges, they also highlighted its adaptability. Hospitality businesses have proven to be incredibly resilient and have adapted their operations in a range of different ways. This adaptability gives hope that the businesses that have survived the pandemic, and those that follow, will emerge stronger than before.

Our vision for the future of the hospitality sector

In recent months, we have worked closely with sector partners and businesses to develop an ambitious vision for the sector that reflects the aims of not only returning the sector to its pre-pandemic health, but which also sets the conditions for a resilient and dynamic sector for years to come.

Achieving this vision: delivering the ‘three Rs’

To deliver our ambitious vision for the sector, we have considered three ‘Rs’: reopening, recovery and resilience. These form the three sequential steps in our strategy. By following the three ‘Rs’, government and sector partners can work together to help the sector to build back stronger and more resilient.

Reopening

This chapter sets out the immediate steps needed to support the reopening of the sector over the short-term, in line with broader COVID-19 pandemic developments. To do this, we will:

1. Support delivery of the final steps in the PM’s roadmap by developing practical COVID-secure guidance for hospitality businesses to help them ease back to normal operations.

2. Provide continued sectoral support, via a dedicated Minister and support team, and help remove any remaining barriers to full operation.

3. Help the sector overcome current recruitment challenges by actively signposting jobseekers to hospitality vacancies.

Recovery

This chapter then sets out the measures required, not only to help the sector’s recovery, but to bounce back stronger over the short-medium term and return to profitability and sustainability. To do this, we will:

4. Work with the sector to boost demand by promoting hospitality and enabling businesses to trade more flexibly, for example by extending current easements, as set out in the High Streets Strategy.

5. Work with the sector to help manage costs, including bringing forward legislation to ringfence rent debt accrued from March 2020 for tenants who have been impacted by Covid-19 business closures.

6. Work with the sector on access finance, including working with the government-owned British Business Bank and its delivery partners.

Resilience

This chapter sets out the measures needed to secure the sector’s longer-term resilience, building a financially stable, dynamic, innovative, green sector that supports jobs, vibrant communities and creates places where people want to live, work and visit.

Building business resilience

This includes measures set out in the High Streets Strategy to help build business resilience. To do this, we will:

7. Improve the long-term relationship between hospitality tenants and landlords.

8. Work with Local Authorities and the hospitality sector to develop a model for hospitality led regeneration hubs, with demonstrators delivered in England, Northern Ireland, Scotland and Wales.

In addition, we will:

9. Work with the sector to learn the lessons of the pandemic for businesses and enable investment in future resilience measures.

Download article PDF: DBEIS Hospitality Strategy