Hospitality can contribute hugely to a national programme of economic growth through generating revenue and creating jobs if it’s given the support it needs.
Industry body UKHospitality Cymru wants to see strengthened partnership working with government to put the sector at the heart of a sustainable tourism strategy, as well as being offered targeted support to enable businesses to reinvest.
David Chapman, Executive Director of UKHospitality Cymru, said the industry was a “genuine economic driver all 12 months of the year” and had “incredible capacity” to generate income for the Treasury as well as to create jobs across Wales.
Whilst businesses continue to struggle with a challenging environment, David said he was hopeful that if the coming months saw growing consumer confidence, then increased spending would give hospitality firms the opportunity to start to reinvest.
Around 140,000 people in Wales work in the hospitality sector, with about another 40,000 jobs in the supply chain. Hospitality accounts for about 85% of the £6.2 billion visitor economy contribution to Welsh GDP.
David said:
“Hospitality is a genuine economic driver all 12 months of the year and part of the indigenous foundation industries that I believe should have more attention from governments at all levels, because of the incredible capacity that it has for generating income for government and also creating jobs in places in every single part of Wales.
“All governments are now banging the drum for economic growth and I'm really pleased to hear that. One of the big opportunities is for a partnership with government. If we're genuinely interested in economic growth we've got to find a way of helping the hospitality industry.”
He said that the hospitality industry in Wales was being particularly hard hit by the cost-of-living crisis, with people not going out as often as they used to, coupled with spending less when they did go out on meals, activities and so on. The weather over the summer months had also impacted consumer spending, he said, with people opting for shorter trips or trips abroad.
And he said that food and drink and energy inflation had had a huge impact.
“We're desperately trying to make our businesses work,” said David. “We're finding that the margins that we need to do that, to be able to continue to employ people, to be able to reinvest in our businesses, are being squeezed and squeezed and we just can't pass it on to our customers because they're feeling the pressure as well.”
David called for support for the hospitality industry on business rates, saying that a reduction in business rate relief in Wales to 40%, compared with England where the relief was maintained at 75%, had had a big impact.
“We've estimated that in the average pub it will be the equivalent of £6,500 a year difference between our businesses and English businesses,” he said. “That causes a disparity between the competitiveness of our businesses and businesses across the border.”
David said reform of the business rates system was urgently needed, adding that adjusting the business rates multiplier for hospitality would help level the playing field against industries who pay less.
He also called on Welsh Government to ensure that any revenue raised via a potential future visitor levy be ringfenced for tourism and hospitality and the services which support them.
“I think we need to be recognised as a key industry which can play a part in economic growth,” said David. “The fact is that if we are able to grow, to reinvest in businesses, to employ more people, then the economic benefit of that is that it goes back into the Exchequer through our taxes.”
