GUEST COLUMN:
David Chapman
Executive Director
UKHospitality Cymru
One sector clearly stands out as the platform for economic growth and job creation in Wales in the next four years – that’s hospitality.
Hospitality is the powerhouse that contributes around £5 billion in economic activity and nearly £1.5 billion in tax receipts to the Welsh economy every year. An inclusive employer of around 165,000 people, it provides employment across Wales, from first jobs to upward routes into leadership and providing a foundation to move into other sectors.
That’s despite a lengthy period when the sector has really felt the pinch. It has been taxed out by Governments and sat directly in the force of the cold blasts of the UK’s economic freeze.
Yet with the right Government support and partnership working, it will help build – and rebuild – communities and act as a leading economic and social focal point for regeneration.
Our published UKHospitality Cymru manifesto – Serving Wales: A Positive Programme for Government – suggests how, with the right investment and regulatory regime, we can reinvest in, rebuild and renew our businesses, help the new Government create thousands of local jobs for people of all ages and how together we can lead the world on sustainable, regenerative hospitality and tourism products.
The following policy recommendations have been developed with these mutual gains in mind.
Business rates: It’s vital that we replace – and if not, substantially reform – business rates in Wales. Businesses that must trade in-person, in-community, and within bricks-and-mortar buildings (as opposed to online, for instance) have picked up an increasing, inequitable and unsustainable share of the taxation burden as the outdated system rolls on.
This has led to hospitality paying 10% of the rates bill, despite representing just 3% of contributing turnover. It is an archaic, unjust tax at a time when costs are soaring and there is great concern about the future viability of these assets.
We need at the very least, a permanent lower multiplier and beneficial valuation methodology, to protect our high streets and community infrastructure.
We also need the Welsh Government’s support for our campaign to lower hospitality’s VAT. I mentioned that the industry in Wales is taxed out. The taxation burden on hospitality is higher than that of any other sector – as much as 75% of pre-tax profit. 20% VAT is too high. The newly elected Welsh Government should lobby UK Government to reduce VAT on hospitality.
Skills, recruitment and retention : Nearly a quarter of the sector’s workforce are under the age of 25, and nearly half under 35 years old. We also provide great opportunities for those returning from work and employment later in life.
We need help to attract and retain new employees and upskill those who work for us. A specialist funding route dedicated to our industry would be a valuable asset.
Support for green investment in the sector: As a major user of energy and food, we need support to achieve our shared goals. Currently, investment costs for addressing carbon output are prohibitive. Our businesses would welcome targeted support to make heat in buildings more efficient and to reduce food and packaging waste.
Infrastructural and connectivity improvements for growth: Our huge, pan-Wales industry has critical dependency on connectivity. Our high streets desperately need renewal; a reform of the planning system, with a faster, streamlined approach to planning applications for hospitality businesses, is crucial for growth.
We seek involvement in improvements in connectivity – transport infrastructure, IT and inter-governmental departmental applications – and areas where business meets consumer and government.
A Tourism and Hospitality Governmental Review: Over the term of the last Welsh Parliament, our businesses were subject to a raft of legislation that either resulted in increased costs or threatened to do so soon. Complex visitor levy legislation, the Wales-only Deposit Return Scheme (DRS) and restrictions on the promotion of high fat, salt and sugar foods were just part of this mix.
The industry remains firmly opposed to visitor levies; to a non-aligned DRS and to a comprehensive reduction in qualifying days for the damaging 182-day rule for self-catering operators.
A new Government brings new optimism. Let’s begin with closer engagement with UKHospitality Cymru and our member businesses. We want a formal Tourism and Hospitality Review that will help design a New Deal for the Visitor Economy in Wales – regulations that future-proof, encourage and empower our businesses while delivering the Government agenda, reduce operating costs, protecting and creating jobs and ensure consumers continue to have trust in our businesses.
