Hospitality – the heart, soul and economic powerhouse of our nation: Comment

Hospitality is more than food and drink. It defines places, nations, brings communities together and provides the welcome to our visitors.

Leon Thompson, executive director, UKHospitality Scotland.

The ancient Greeks knew it. Decreed by the gods, the Greek laws of xenia demanded that hospitality, delivered with kindness and generosity, be extended to everyone to create a special bond.

In keeping with this ancient tradition, it was fitting that as we celebrated National Hospitality Day yesterday, businesses across the country thanked their patrons for their kindness and support - so vital at the moment as hospitality continues to grapple with challenges and uncertainty as we head into autumn and winter.

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It is critical for the recovery of the hospitality sector and the wider economy that businesses are allowed to continue to operate in viable conditions throughout this winter. Hospitality venues are still in a fragile state with significant debts, only just setting out on the road to recovery and working to restore balance sheets. Restrictions over the coming months will result in more business closures.

UKHospitality Scotland is the voice that represents the broad hospitality sector – covering everything from bars, hotels, coffee shops, contract catering, nightclubs, visitor attraction, escape rooms, bowling alleys, independent and large multinational sites. As the industry trade body operating across the UK, we are working to unlock the industry’s full potential as one of the biggest engines for growth in the economy and to ensure that the industry’s needs are effectively represented by engaging with the Scottish and UK Governments, the media, employees and customers.

Whilst the work of UKHospitality in gaining support from government has helped to get the vast majority of our businesses through 18 months of lockdown and restricted opening, there is still much more to.

The challenges facing hospitality in Scotland are widely reported, with live issues of labour and supply shortages and the imminent introduction of vaccine passports for nightclubs and some events top of the list.

Last week’s update on official job numbers from the Office of National Statistics underline the significant impact the ongoing tightness and disruption to the labour market and associated labour shortages are having across the economy. However, the figures also show that hospitality is suffering most when compared to other sectors. According to the ONS, the hospitality’s sector vacancy rate is twice that of the economy as a whole.

The report also shows that hospitality created 122,000 new jobs between March and June. The sector has been at the forefront of job creation as the economy begins to recover and rebuild. But with additional pressures and uncertainties, as well as being the last sector to reopen, hospitality has been hamstrung in its attempts to fill vacancies. The economy is also close to operating at full employment, making the need for Government support on this issue absolutely vital.

Businesses are trying to make good use of initiatives like Kickstart, but these need to be functioning effectively as we have tens of thousands of jobs to offer people. The Scottish Government has been hugely supportive of the sector; support which has included financing a recruitment campaign and we look forward to continuing to work with Ministers to help us get more young people into hospitality apprenticeships and training.

Given the shortage of workers, the UK government must also seriously consider temporary immigration reforms, adding hospitality roles to the Shortage Occupation List and supporting the broader supply chain. The labour problems of the summer for hospitality and the wider economy are not going away and will become even more acute as we move towards Christmas.

The latest figures once again show the unique impact the pandemic has had on the hospitality sector - but also its potential to be at the forefront of the economic recovery with the right support and full trading conditions in the coming months.

Hospitality continues to play its part in protecting customers and the workforce from covid. Across the sector, many millions of pounds have been and continue to be invested to keep premises covid secure. Many businesses continue to go beyond baseline measures, retaining booking systems and table service only, for example. Whilst this limits the ability of businesses to trade at full capacity, it ensures that customers and workers can feel safe in venues and helps to reduce the spread of covid.

Businesses are working hard to ensure safety, which makes it doubly hard to accept the logic of the Scottish Government’s introduction of a vaccine passport for nightclubs. Logistically unworkable in the timescale and with questionable effectiveness, the scheme will have a devastating impact on nightclubs and large-scale events. These sectors have been hit hardest and were the last to reopen. They now face a measure which will severely undermine their profitability and ability to recover over the winter months. Members fear they will lose 40% of their revenue as younger customers may be unable to get certification before 1 October, whilst others choose to stay away.

Hospitality is a job creator and can drive economic growth. But further support from both of our governments is required to realise this. Measures UKHospitality Scotland is calling for include the long-overdue reform of business rates, whilst colleagues in London push for a permanently lowered rate of VAT for hospitality. These changes can unlock the sector’s full potential.

Hospitality is one of Scotland’s greatest economic success stories and UKHospitality Scotland will continue to champion a sector that touches every corner of our country and every aspect of our national life.

- Leon Thompson, executive director, UKHospitality Scotland.

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