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Tuesday, 14th February 2023

Last supper?: romance may be blossoming, but the hospitality industry’s future is less rosy

Dan Regan

Romantic,Dinner

 

Tonight, the hospitality industry limbers up for a set piece. Valentine’s Day never fails to drive anxious lovers to the warmth, buzz and novelty that only gastronomy can muster. Venues in cities, towns and villages across the country conjure aphrodisiac delights of chocolate and red food colouring, and peel with fizzing corks and the muffled snaps of ring boxes. Meanwhile, their patrons pray for plentiful covers.

Decent takings at the tills this week would deliver blessed relief during a tough financial quarter and help tide establishments into next month. But even the boons of bacchanalian blowouts are easily submerged by the tsunami currently engulfing the industry. A deadly confluence of threats has pushed the sector to its limits: rampant inflation, bottleneck labour shortages, supply chain barriers, soaring costs of servicing debt and, of course, previously unfathomable energy bills. These problems are playing out across the whole economy, but they could yet deal a coup de grâce to an industry that is always negotiating wafer-thin margins.

Yesterday, data published by the accountants UHY Hacker Young spelled out the scale of the trouble. Last year 512 pubs and bars folded in the UK, a rise of 83 per cent on 2021. Among the businesses surveyed, energy costs were frequently cited as the straw that broke the camel’s back. These testimonies are of particular concern – the government’s multi-billion-pound support package was supposed to insulate the industry against extreme spikes in the market. Publicans, restaurateurs and hoteliers eye the approaching cliff edge in April, when the price cap lifts, with little short of dread.

Does this warrant special attention? Some might say that hospitality is mid-ranked in the long queue of deserving causes, that frivolity is inimical to belt-tightening times, and that the changing face of the high-street is merely the sharp end of market turmoil, to be accepted stoically. But such arguments miss the point. 

“Publicans, restaurateurs and hoteliers eye the approaching cliff edge in April, when the price cap lifts, with little short of dread.”

Hospitality touches all of us in one way or another. From glittering constellations of Michelin-starred genius to the worn wooden fixtures of the humble local boozer, people around the country know the power of hospitality to facilitate a good time, bring friends and family together and give us a taste of ambrosian delights. 

Wild hedgerow, crushed pencil, and a shroud of brambly fruits – the sensuous rush of a lovingly grown wine, cellared with skill, and temperately served in a restaurant. The pitch of a partner’s laughter over the hubbub of the Dog and Duck. Life’s pleasures can be difficult to articulate, but they are what we all need in times of hardship.

These experiences stand on their own two feet, but behind them the industry is a crucial job supplier. Pre-pandemic, UK hospitality businesses employed a staggering 3.4 million people, close to a fifth of the entire labour supply. Today those numbers have dipped, but partially because our hotels, pubs, clubs and restaurants face their worst staffing crisis in years, with 94 percent struggling to recruit. These are the skills and careers developed in hospitality that will be integral to the economy of tomorrow – they do not go out of style, and are eminently transferable in the modern labour market.

“Pre-pandemic, UK hospitality businesses employed a staggering 3.4 million people, close to a fifth of the entire labour supply. Today those numbers have dipped, but partially because our hotels, pubs, clubs and restaurants face their worst staffing crisis in years, with 94 percent struggling to recruit.”

It is not for lack of ideas that the industry has become unstuck. UK Hospitality, the sector-wide trade body, has been self-diagnosing its malaise for years, and pleading for intervention. There are no magic bullets, but support measures, ranging from VAT relief to sector-specific immigration and long overdue reform of owner business rates top the list. The government faces a delicate task in responding to a long queue of worthy causes, but it has shown the willingness and ability to intercede. Eat Out to Help Out was only partially about getting punters back into the service economy, it was also a recognition of how badly people need hospitality in times of crisis. The times may have changed, but the same rules apply. Until that is appreciated, today’s floral perfusions aside, the future is less than rosy for hospitality.