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Hospitality Strategy: Reopening, Recovery, Resilience

The UK Government has published an update on the delivery of its Hospitality Strategy. The initial strategy was published in July 2021 and set out the Government’s target to help the industry “build back stronger and greener from the pandemic.”

Whilst the report does not outline any new policy areas, it does act as a display of the Government’s continued commitment to the sector.

The document begins with an overview of the state of the sector. It reports that the sector is beginning to show signs of recovery from the Covid-19 pandemic. However, it acknowledges the current issues the sector is facing with staffing, inflation and energy costs, concluding that these pose a “significant risk in the short-medium term” and “many businesses remain in a state of recovery.”

The Government outlines the support that it has already provided for the sector through reopening, the Energy Bills Relief Scheme and the Kick Start Scheme. It highlights the Strategy’s key ambition of “building long-term resilience” and set out the ongoing work that it is taking in this area to deliver this in six areas:

  • Business resilience
  • Jobs and skills
  • International trade and tourism
  • The environment
  • Innovation and investment
  • Community and wellbeing

In each area, the Government outlines how it is delivering on the commitments of the hospitality sector, with a sub-committee of the Hospitality Sector Council responsible for overseeing its progress. The report did not include any new policy announcements, but highlighted schemes and initiatives that the Government or the sector has introduced to deliver on these targets. Greene King’s Releasing Potential scheme is named in the Jobs and Skills section, alongside Burger & Lobster and Pret’s efforts to employ Ukrainian refugees as examples of hospitality businesses contributing to important social initiatives.

The report confirms the UK Government’s commitment to supporting the hospitality sector and encourages further collaboration between the Department for Business and Trade, the Hospitality Sector Council and the wider industry moving forwards, something that FEA applauds. Below is a full list of key statistics about the sector and the Government’s commitments in each area. The full report can be downloaded at the bottom of the page.

State of the Sector – Key Points

  • Aggregate output of the hospitality sector has now surpassed pre-pandemic levels, with output 7.1% above 2019 levels in the 12 months to December 2022.
  • 70% of consumers now feel confident about visiting pubs, bars and restaurants, more than double the number (34%) who felt the same way at the start of 2021.
  • The total number of workers on hospitality payrolls has also returned to pre-pandemic levels and was 4.0% higher than February 2020 levels in the 12 months to January 2023.
  • Official data show that there were 146,000 job vacancies across the hospitality sector in the 3 months to January 2023.
  • The sector is estimated to have a vacancy rate of 6.6%, the highest of all sectors covered in the ONS data.
  • The ONS also found 70% of hospitality businesses reported that the prices of the goods and services they purchased, such as food and drink wholesale products, had increased in December 2022 compared with the previous month, significantly above the economy-wide average of 40%.
  • Operators were reporting energy bill increases in excess of 300% over previous levels in many cases, before the Government intervened.
  • Insolvencies have risen steadily since August 2021 and were 30% above 2019 average levels in the 6-months to December 2022.

Building Business Resilience

  • Improve the long-term relationship between hospitality tenants and landlords
  • 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.
  • Work with the sector to learn the lessons of the pandemic for businesses and enable investment in future resilience measures. 

Jobs and Skills

  • Explore options for vocational training offers that support career paths in the sector.
  • Work with the sector to raise the profile of skills and careers in hospitality.
  • Encourage hospitality businesses to participate in government programmes, including the Help to Grow scheme, to improve digital and management skills in the workforce.

International Trade and Tourism

  • Showcase the best of UK hospitality in future international communications campaigns.
  • Promote UK hospitality businesses overseas through inclusion in international ministerial visits and trade shows.
  • Work with businesses to establish themselves abroad, by working with the sector to identify barriers and address export challenges, building on opportunities following the UK’s exit from the EU. 

The Environment

  • Meet, create, and share best practice on environmental guidance to help businesses decarbonise supply chains and achieve Net Zero, seizing the opportunity of COP26.
  • Reduce waste and single-use plastic consumption
  • Help ensure any recyclable waste produced is collected for recycling.

Innovation and investment

  • Bring sector leaders and businesses together with the UK’s world leading innovation system, including universities and Innovate UK, to support the creation of the next generation of hospitality start-ups, and encourage them to take advantage of emerging technology and digital trends.
  • Encourage technology adoption by leveraging the Help to Grow scheme and working with Be the Business and businesses to produce sector-led guidance.
  • Work with the sector to develop dynamic new operating models, including by identifying and overcoming barriers to innovation.
  • Work with the sector to champion the role of hospitality in community wellbeing as we emerge from the pandemic.

Download the full report

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