Hospitality Strategy update 'shows substantial progress'

Originally launched in 2021 by the then Business Minister, Paul Scully, the strategy saw the creation of a Hospitality Council​​ tasked with seeking solutions to the sector’s post-pandemic issues.

UKHospitality chief executive Kate Nicholls said the update showed 'substantial progress' that has already been made in the sector’s recovery, and the clear value in working closely with government.

Published by the Department of Business & Trade, and including a foreword from Business Minister and council chair Kevin Hollinrake MP, it finds the aggregate output of the hospitality sector has now surpassed pre-pandemic levels.

Output was 7.1% above 2019 levels in the 12-months to December 2022, having increased since April 2021.

It reports consumer demand for hospitality held up relatively well during the Christmas trading period, with like-for-like December 2022 sales 15% ahead of December 2021.

Despite the growth in the sector’s output and employment levels, the update finds a gradual rise in business insolvencies relative to 2020-21 levels.

Insolvencies have risen steadily since August 2021 and were 30% above 2019 average levels in the 6-months to December 2022.

According to the update, the data confirms the need to pursue a 'strong and broad-based recovery, and a longer-term effort to increase resilience, to help the hospitality sector drive growth in the months and years to come'.

It details how the Government has provided support to help address recruitment challenges.

The Kickstart scheme launched on 2 September 2020 and provided funded, six-month jobs for 16-24-year-olds on Universal Credit and at risk of long-term unemployment, with over 14,000 starts in the hospitality sector funded by the scheme.

Following the winding down of financial government support, the government introduced the first hospitality sector support team into the new Department for Business and Trade, following business feedback.

With the process of recovery is now underway, 'positive signs of investment and growth are visible', it reports. But with many challenges around costs, labour, energy and global supply, the Government is 'committed to helping the sector to overcome or mitigate them'.

Temporary regulations to make easier for businesses to operate outdoors have been extended or made permanent.

Longer-term solutions are needed though, and the government is seeking the views of the licensed sector, local authorities, and other interested parties to understand whether there would be support for a streamlined process for alcohol licences, which would be a permanent alternative to the current alcohol licensing easements.

The Government also announced an increase in the threshold for small business regulations, to widen these exemptions to businesses with fewer than 500 employees for future and reviewed regulations, meaning an additional 40,000 businesses will be freed from future bureaucracy.

Kate Nicholls said: “The Hospitality Strategy was a seismic shift in the way Government sees hospitality, as was the development of a Minister with specific responsibility for the sector.

“This update shows the substantial progress that has already been made in the sector’s recovery and towards a more resilient future, despite the massive external shocks we have faced.

“The work following the publication of the strategy shows the clear value in Government working together with industry on key issues within the sector, but there is still more to do to meet our mutual objectives.

“Action from the Chancellor in the Budget this month can help support those objectives, particularly across workforce, energy resilience and access to finance. Intervention in the energy market, reform of the Apprenticeship Levy and greater flexibility around debt repayments would greatly benefit hospitality businesses, allowing them to accelerate growth and create even more job opportunities.”