17 AUGUST 2023: In responses to consultations on renewable energy rates support¹ and improvement rates relief², the leading trade body has said the plans will incentivise hospitality businesses to invest in their venues to improve its carbon footprint or improve the customer experience.

David Chapman, UKHospitality Cymru Executive Director, applauded the plans as a positive demonstration of Welsh Government backing business.

He also urged them to go even further by making the measures permanent and to consider other areas, including desperately needed business rates reform, which could support the industry as it continues to rebuild.

“Hospitality businesses in Wales are keen to make improvements to their venues, whether it’s improving existing buildings or investing in new technology to help them become more sustainable,” Mr Chapman said.

“Incentivising business to make improvements to their venues is a win-win. Not only does it improve efficiency and sustainability but it can help attract more people to a local area, support high-streets and drive business investment.

“I’m pleased the Welsh Government has recognised the benefits these exemptions and reliefs can deliver. Not only is it a common-sense approach to encourage investment but it’s a clear signal to business that their concerns are being heard.

“I’d encourage the Government to go a few steps further by making the renewables proposal permanent and extending the proposed relief period for buildings improvements from 12 months to 24 months, in addition to considering a radical rethink of business rates reform.”

UKHospitality Chief Executive Kate Nicholls said: “Massive congratulations to the Lionesses – what a fantastic achievement to reach the World Cup final. I know the entire nation will be rooting them on this Sunday, with plenty making the most of the occasion by watching from their local pub or bar.

“We’ve seen venues already make a huge effort for the Women’s World Cup and we expect that to go even further this Sunday, which will inevitably lead to a boost for hospitality businesses.

“We all know the best way to watch sport is down the pub, so I’d encourage everyone to turn out in their droves this Sunday to support the Lionesses.”

“However, core inflation remaining flat at 7% does raise serious concerns that hospitality businesses will be hit hard by an inflation-linked hike in business rates next year.

“With rate increases following the September inflation rate, we need to see a dramatic fall in inflation by then or hospitality will face a business rates bill running into the hundreds of millions.

“It’s clear the fall in the overall rate has been driven by decreasing energy costs, which suggests further action on energy could result in inflation coming down far more rapidly. Ofgem has set out a number of recommendations to clean up the energy market and these should be implemented as soon as possible.”

“Critical roles, like chefs, remain challenging to recruit and that continues to restrict hospitality businesses from operating at anywhere near their full capacity.

“Significant investment to attract and develop our own talent continues, through apprenticeships and training, but we urge the Government to open up new immigration routes, such as widening the Youth Mobility Scheme and Shortage Occupation List, to help the sector reach its potential.”

The Prime Minister’s personal intervention has been widely welcomed and is evidence of the Government’s commitment to deregulation. It represents a reversal of the initial decision, which was met with widespread disappointment by the sector.

UKHospitality Chief Executive Kate Nicholls said: “This is a very welcome intervention by the Prime Minister in response to representations from UKHospitality and the sector more widely.

“Many businesses benefitted for the first time from pavement licences and created new outdoor areas but, for some, the use of them was only allowed by a corresponding temporary permission for takeaway sales or al fresco dining.

“The government was originally proposing to extend the former but not the latter and this would have tied up many more restaurants, bars and pubs in red tape; requiring an application for some to continue using their outside spaces.

“This is a welcome dose of common sense. As the Prime Minister rightly says, now is not the time to tie these businesses up in additional bureaucracy and cost just as they continue their recovery from the pandemic. We very much appreciate his personal intervention and ongoing support.”

With energy costs continuing to act as the single most destructive inflationary pressure facing businesses, hospitality needs to unite to demonstrate the urgent need for Ofgem to move swiftly in enacting its recommendations.

Hospitality businesses can show their support for swift action and back our calls by responding to the Ofgem consultation here.

In order to enact meaningful change within the energy market, UKHospitality is urging Ofgem to:

1. Encourage suppliers to resolve issues many businesses are facing with high energy contracts, including direct and immediate communication to suppliers from Ofgem.
2. Offer greater transparency to customers, deliver more timely responses to complaints and drive better practice in setting deemed rates.
3. Deliver wider access to the energy ombudsman.
4. Put in place measures to prevent the blacklisting of entire sectors, particularly hospitality.
5. Improve regulation of energy brokers, including extending protections to more businesses.

UKHospitality Chief Executive, Kate Nicholls, said: “Sky-high energy costs have decimated so many hospitality businesses, including those suffering from contracts fixed at prices far above current market rates.

“The Ofgem review last week was crystal clear that many of the issues facing businesses lie at the door of the energy suppliers. Whether it is refusing to renegotiate contracts, demanding enormous deposits, or simply refusing to supply the sector, it’s clear that some energy suppliers are mistreating the sector.

“That review also laid out a number of important recommendations to clean up the energy market, in particular strongly encouraging suppliers to renegotiate contracts.

“This consultation is an opportunity for the sector to unite and demonstrate the strength of feeling that Ofgem needs to take action urgently. Businesses cannot withstand inaction any longer and the market needs to be urgently fixed.

“Yet another rise in interest rates only exacerbates the financial challenges many are grappling with, alongside high energy costs, food and drink inflation and labour shortages.

“The inflationary pressures we’re facing as a nation are supply, not demand, led so we need to see urgent government action to bring down these business costs. A good starting point would be to rapidly implement the recommendations made by Ofgem last week to mitigate the energy crisis.

“We would also urge flexibility on loan repayments, including extension to terms, options to move to interest-only payments or delay altogether, and flexible arrangements from HMRC for tax payments.”

“UKHospitality and our members have been engaging with the Home Office to ensure that Martyn’s Law can be achieved in a way that is proportionate and practical for venues and does not cut across the existing effective work that businesses are doing in this area. Getting the balance of practicality and safety is crucial, and we hope the Home Office takes on board the recommendations from the Committee to achieve this.

“Protecting our customers and staff is a priority for venues, who want to ensure that the great experiences hospitality offers also comes with the best possible safety and security for all.

“We will continue to work with our members to help provide comprehensive guidance on compliance and implementation as the legislation develops, as well as continue our work alongside the Home Office on the formalisation of the Bill itself.”

The measures on which views are sought include the use of debit card payments on machines and player protections to promote responsible gaming, all of which will help future proof the gaming offer in pubs.

In a joint statement, UKHospitality and the British Beer and Pub Association said: “This consultation is a welcome step towards a much needed review of issues that could protect the longevity of safe and enjoyable gaming in pubs.

“UKH and BBPA work closely on gaming issues and our joint group will feed in via the associations, no doubt with one voice and unanimity.”

“By opening up new channels of communication, extended protections and more guidance, businesses across the industry can benefit from levels of support that simply have hitherto been lacking. 

“UKHospitality has continued to raise the reckless behaviour of some energy suppliers with Government, with some offering rates well above wholesale prices, hiking standing charges, demanding eye-watering deposits, and, in some cases, refusing to work with hospitality companies.A recent member survey shows that energy costs are up 80% year-on-year and almost half of businesses who signed a contract at the peak of the energy crisis fearing their business is at risk of failure. 

“Whilst it has been a long time coming, it is reassuring to see that Ofgem is now doing what it can to support the hospitality sector. 

“Energy companies must be held to account, and we are committed to continuing to work with Ofgem and Government to ensure the market is future-proofed. The recommendations in this review must be actioned urgently, as delays could lead to further business failures – of which there have been a significant number.” 

Key representatives from Food 7 Cymru, which brings together seven leading trade associations, will join First Minister Mark Drakeford MS where they will bring news of the development of the newly-formed farm-to-fork grouping.

The seven trade associations - the Welsh Retail Consortium, National Farmers Union Cymru, Farmer’s Union of Wales, Logistics UK, Food and Drink Federation Cymru, The Association of Convenience Stores and UKHospitality Cymru - have linked to promote and sustainably develop employment, investment and growth in the vital food and drink sector.

“This new network is a milestone in the representation and promotion of this incredible industry,” said Food 7 Cymru co-ordinator David Chapman, Executive Director of UKHospitality Cymru. “Every part of this huge sector - from farms and manufacturers to pubs, restaurants, hotels, shops and retailers and transport businesses - comes under our banner.

“Food 7 Cymru will highlight food and drink’s significance to the economy, employment and communities in Wales and will also provide a platform to shout about our successes and our ambitious plans to train, employ and invest here in Wales.”

UKHospitality has been a strong proponent of both measures being made permanent, after being temporarily introduced during the pandemic. As part of its consultation response, it highlighted the benefits to the economy and businesses, as well as increasing footfall in local areas and supporting the growth of communities and high streets.

UKHospitality Chief Executive Kate Nicholls said: “There’s no doubt that this is disappointing news for hospitality businesses. The temporary measures introduced during the pandemic were practical and enabled businesses to generate additional sales.

“This decision will raise questions among hospitality businesses about how serious the Government is about reducing red-tape for businesses, particularly when this would have been a low-cost, high-reward change.

“I would continue to urge the Government to consider measures like these as prime targets for change, as part of its focus on deregulation. UKHospitality and its members are keen to work together with government departments to identify areas that can be improved or changed, to reduce the regulatory burden and boost the economy.”

UKHospitality Chief Executive Kate Nicholls said: “The Work and Pensions Committee’s comprehensive report highlights several areas where hospitality can help get people back into work.

“The variety hospitality offers and the flexible nature of hours available means the sector is perfectly suited to helping older people back into the workforce or supporting those who have accessibility requirements. Providing businesses with more information to support and enhance hiring processes, in addition to industry-produced guides like our recruiting over 50s guide, is a welcome recommendation.

“Giving more powers to local authorities to meet local vacancy needs is crucial and something the sector would support, particularly as the needs of a restaurant in London will differ significantly from a hotel in Cumbria. Working with local hospitality businesses is crucial to making that a success.

“UKHospitality is already working extensively with the Department for Work and Pensions through its promotion of JobCentrePlus and a proposed new ‘boot camp’ scheme for hospitality to ensure the sector is doing all it can to offer people fantastic career opportunities.”

UKHospitality has led calls for a scheme that ensures high standards of health and safety, fire safety and accessibility are applied to and followed by short-term lets, doing away with the two-tier accommodation sector that has been created by the lack of regulation in this area.

UKHospitality Chief Executive Kate Nicholls said: “The Mayor is absolutely right to raise the issue of short-term lets in the capital. Whether it’s a lack of visibility preventing checks of basic standards of safety and accessibility or the impact it has on housing stocks, it’s clear that action is needed.

“We’ve backed the Government’s proposals for a registration scheme to tackle the issue in England and we agree with the Mayor that the data captured needs to be shared between both national and local authorities to drive good decision-making.

“A well-functioning scheme to bring short-term lets up to standard would be hugely significant and I hope that the Government can work with Mayors and local authorities across the country to make it a success.”

“This reinforces that for inflation to fall further and faster, there needs to be more action to bring down those twin pressures of food and energy costs

“Hopefully today’s better than expected figures also give pause for thought on additional interest rate rises, which are already having a significant impact on the sector.”

Despite outdated evidence and opposition from the sector, the Home Office has confirmed today that the late night levy will be extended to:

• Allow local authorities to create late night levy areas smaller than their local authority boundaries.
• Extend levies to late night refreshment premises.

UKHospitality Chief Executive Kate Nicholls said: “It’s really frustrating that the Home Office has proceeded with this extension of late night levy powers, particularly when the evidence base is seven years old and horribly out of date.

“Introducing more powers for local authorities to implement the levy and making more venues eligible to pay is a damaging blow to the late night economy, which already paid hundreds of thousands of pounds in late night levies last year.

“Given the challenging economic circumstances businesses face, the Government should be focused on reducing regulation and easing cost burdens. Instead, they have chosen to add more. This will simply stymy investment and limit economic growth.

“I would continue to urge the Government to show that it’s on the side of businesses and abolish the late night levy as soon as possible.”

Top representatives from Wales’ hospitality sector were able to share with the Deputy Minister the strategic importance of the industry to the economy and its potential to deliver more.

UKHospitality Cymru Executive Director David Chapman said: “It was fantastic to have the Deputy Minister join us today and meet with hospitality businesses, hearing directly about the challenges they’re facing but also the huge potential that exists within the sector. 

“Hospitality is a lynchpin of our economy, delivering £4 billion to the Welsh economy each year and employing 165,000 people. The fantastic experiences we offer are a huge attraction to the millions of tourists that visit Wales each year and are part of what makes Wales a leading visitor destination.

“The Minister recognised the industry’s important role and our members welcomed offers of closer partnership working in the future to help find solutions to some of the difficult challenges facing the sector.”

Dawn Bowden MS, Deputy Minister for Arts, Sport and Tourism, said: “It was a great opportunity to meet with the members of UKHospitality Cymru last week. The visitor economy is an important part of the wider Welsh economy, supporting tens of thousands of jobs across the country and bringing in tens of millions of pounds every year. 

“We are ambitious for Wales as a tourist destination and will continue to work with communities, visitors and businesses to achieve sustainable growth for tourism across Wales - and also look forward to continue working with UKHospiality Cymru to support the sector."

“Moving forward with an independent review board to oversee regulations is significant. It’s my hope that this review board will result in better regulation for hospitality businesses and will avoid the myriad of issues we experienced with the Deposit Return Scheme.

“There has already been evidence of this new approach in the Scottish Government’s engagement with hospitality on the Visitor Levy. However, concerns remain on plans for charges on single use cups and restrictions to alcohol promotion and marketing.

“I’m pleased UKHospitality Scotland has been able to feed in directly on non-domestic rates, particularly as the system has not been fit for purpose for decades now. Recommendations to keep reforms to non-domestic rates under review is a good start but we need to see reform actively implemented, to bring the system up to speed with the modern economy. Only by doing that can we unlock vital additional investment from our businesses.

“I’m hopeful that this level of engagement with the hospitality sector will continue and that together we can realise the potential hospitality offers in terms of economic growth, job creation and rejuvenating local communities and high streets.”

With a recent member survey¹ showing that energy costs are up 80% year-on-year and almost half of businesses who signed a contract at the peak of the energy crisis fearing their business is at risk of failure, energy remain a key driver of inflation.

As the cost of doing business continues to increase, hospitality businesses will have no choice but to feed these increases through to the consumer. This, unfortunately, drives inflation.

UKHospitality Chief Executive Kate Nicholls said: “If the Government is to achieve its aim of halving inflation, it simply must tackle the ever-growing cost of doing business.

“We’ve seen today that food price inflation for hospitality has increased yet again, to almost 22%. Energy costs are hitting farmers, food producers and manufacturers, and hospitality businesses and will result in entrenched inflation, unless businesses can get out of energy contracts that were fixed far above the current market rate.

“It’s my hope that the Chancellor raised this urgent need for action with Ofgem today, as he met with regulators, as there has been little in the form of action so far.

“While its review into the non-domestic energy market is positive, it has been ongoing for at least six months with no conclusions. The severity of the situation facing hospitality businesses requires far more urgency from the regulator and this inaction has resulted in business failure, which we have continuously warned of.

“If Ofgem is unable to act and intervene in the energy market, compelling suppliers to renegotiate with customers, then I would urge the Government and the CMA to step in, properly investigate the market and do right by hard-working businesses by taking meaningful action.”

“Venues will have been gearing up for bumper sales as schools break up for summer holidays and major sporting events, such as the Ashes and the Open, attract thousands of fans.

“Strike disruption over the past year has already cost the hospitality sector £3.25 billion in lost sales and there is no doubt that figure will increase as a result of these strike days. Businesses, workers and consumers all lose out and confidence in our critical transport network is taking a fatal blow.

“It is imperative that the Government, rail companies and unions reignite negotiations and get back round the table as a matter of urgency. Sectors like hospitality continue to be collateral damage in this dispute and I would urge all parties to reach a resolution to avoid further damage to the economy.”

With the right economic conditions, hospitality has the potential to grow its economic value by £29 billion by 2027 but in the worst-case scenario, it could contract by £4 billion.

Flexibility by Government and banks on repayment terms, including Covid loans, are a critical part of avoiding that. This should include extension to loan terms, options to move to interest-only payments or delay payments, and flexible ‘Time to Pay’ arrangements from HMRC for tax payments.

UKHospitality Chief Executive Kate Nicholls said: “Hospitality has a proven record of delivering growth and creating jobs, and we want to achieve that £29 billion economic boost by 2027. However, steep increases in interest rates will quickly stifle growth and squash that potential.

“Hospitality has significant levels of business borrowing, including £10 billion alone from the pandemic, and it is a worrying situation if businesses have no choice but to prioritise loan repayments over business investment.

“Combined with other cost pressures across energy, food and drink, this is quickly becoming a ticking time-bomb that needs urgent attention.

“A direction from the Chancellor to banks to adopt a flexible approach to business borrowing and repayments would be a lifeline for many and should be a top priority for the Chancellor tomorrow during his talks with major lenders.

“We want to continue our track record of delivering growth and creating jobs, and the last thing we want to see is more businesses lost to circumstances out of their control, so I would urge the Chancellor to work closely with the banks on providing much-needed support to hospitality businesses.”

“Measures to tackle sky-high energy costs, bring down the cost of food and drink, and ease ongoing worker shortages would be effective measures to bring down the cost of doing business, and in turn help reduce inflation.”

A new report launched today at UKHospitality’s summer conference reveals that in the past six years hospitality has increased its annual economic contribution by £20 billion to £93 billion. It also shows that employment in the sector has risen to 3.5 million, making hospitality the third largest employer in the country.

The report, produced by Ignite Economics, details how hospitality operates at the centre of the economy. In 2022 alone – and in spite of post-pandemic challenges still stifling growth - hospitality contributed £54 billion in tax receipts to the Treasury, generated £20 billion worth of exports and £7 billion in business investment.

UKHospitality Chief Executive Kate Nicholls said: “These figures show just how much of an economic powerhouse hospitality is.

“Despite going through a pandemic and a cost-of-living crisis over the past six years, as a sector we have continued to overcome challenges to increase our value to the economy and cement our position as a major employer.

“It’s essential that our role as a strategically important sector for the nation is recognised by politicians, and that we work together to help grow our economic contribution, create more jobs and enhance our offering in communities.

“This report shows what can be achieved if we can stimulate growth, bear down on inflation and have an enabling and supportive policy environment in place for hospitality. The potential for the sector to deliver another £29 billion to the economy annually is an opportunity that the Government should be eager to embrace.

“I urge the Government to work even more closely with us, to seize the opportunities available and unleash the incredible potential of hospitality. This means tackling short-term issues that are stifling further growth, like enormous energy costs, food and drink inflation and damaging labour shortages, and really looking at the long-term structural issues holding businesses back, across business rates, licensing and planning.

“I’m incredibly proud of the resilience our sector has shown in recent years and the fact we continue to be a significant source of economic growth.

“Our sector has a long track-record of growing rapidly and driving the economy – these figures back that up and I hope the potential of hospitality is harnessed by the Government.”

In line with UKHospitality’s policy, the change will take place at its summer conference and AGM on Wednesday 14 June. The conference also marks constitutionally scheduled changes to the wider membership of the UKHospitality Board.

UKHospitality Chief Executive Kate Nicholls said: “I’m delighted that Steve has taken on the role of our Chair, to which he will bring a wealth of knowledge from decades working in hospitality, tourism and travel.

“There’s never been a more important time to have one voice to Government and I know that Steve will continue working across our broad membership for the betterment of the sector, as he did in his role as Vice-Chair.

“UKHospitality is continuing to build on its success – bringing in new members from across the sector and further extending our work across hospitality, tourism and leisure – and I’m looking forward to working with Steve to develop our offering even further.”

Steve Cassidy has been a key member of the UKHospitality Board since it was formed, most recently as Vice-Chair, and has more than 30 years’ experience in the travel industry. He joined Hilton in 2009 and now heads up the international hotel company’s business in the UK, Ireland and Israel where it has more than 170 hotels.

He said: “I am incredibly proud to become chair of UKHospitality, an organisation that has supported and championed our industry with such passion and drive, especially through the recent tough years we have endured.

“Our industry is unique in its ability to create economic value, enable social mobility and build communities.  I look forward to working with Kate and the UKHospitality Board to further galvanise our powerful sector and speak with a united voice to Government, helping deliver meaningful change for our members, benefitting the whole of the UK.”

Kate also paid tribute to Steve Richards, who served as UKHospitality Chair since 2018. Steve will remain on the board and succeed Nick Varney as President of UKHospitality.

She said: “I’d like to thank Steve Richards for his diligent service to UKHospitality since its inception five years ago, and for his dedication in his time as Chair, where his leadership and ability to bring people together had a hugely positive impact on our sector, particularly during the pandemic. He is a fantastic ambassador for the sector and I know he will continue working hard on its behalf, both in his new role as President, and also as chair of the Hospitality Tourism and Skills Board.”

There have also been a number of changes to the Board’s membership. Joining the Board are:

• Fiona Eastwood, Chief Operating Officer, Midway and Resort Theme Parks at Merlin Entertainment
• Simon Emeny, Chief Executive, Fullers
• Steve Holmes, CEO, Azzurri Group
• Dave McDowall, CEO, Stonegate Group
• Rob Pitcher, CEO, Revolution Bars Group
• Martin Robinson, Non-Exec Director, Burger King, Parkdean Resorts and Travelodge
• Catherine Roe, Chief Executive, Elior

Leaving the Board after full terms are Wendy Bartlett, Executive Chairman, BM Caterers; Peter Marks, Executive Chairman, REKOM UK; Calum Ross, Proprietor, Loch Melfort Hotel and Restaurant; Nick Varney, former CEO, Merlin Entertainment; Paul Wigham, CEO, All Our Bars.

Steve Richards said: “As I move on from my role as Chair, I’d like to thank Wendy, Peter, Nick, Calum and Paul who have worked tirelessly, and I know they will continue to lend their considerable influence to the work we do as our sector faces into a fresh set of challenges and political uncertainty.”

Kate concluded: “I want to thank those Board members whose tenures have come to an end, many of whom have also served since UKHospitality’s inception. They have all brought valued expertise and insight, which has helped influence our campaigning over the past five years.”