Hospitality and tourism has had a tough few years, writes Nick Mosley. Clearly the pandemic decimated the industry globally and – despite a return to relative normalcy – many new challenges have come to the fore in recent years.
Without doubt the industry is one of the largest single contributors to UK GDP yet it is notoriously difficult to quantify the economic impact in terms of GDP and employment. It has often been said by those in the industry that its a ‘hidden sector’ as there is so much cross over between in-bound visitors and UK residents. As a UK citizen when does your shopping trip become a ‘visitor experience’? Does your spend on a trip from Brighton to Worthing – or vice versa – account as visitor spending? You start to see the challenges with the calculations.
These are the issues that face the likes of the Office of Budget Responsibility, UK Hospitality and Visit Britain in giving firm numbers. And also why central government – and it historically hasn’t made much difference if that was red or blue – hasn’t taken tourism and hospitality particularly seriously despite the billions of pounds generated annually.
On a local level we have access to a slightly more accurate picture. According to a tourism economic impact report commissioned by Brighton and Hove City Council in 2022, the city – at that time as the country was coming out of the pandemic period – generated around £1.3 billion from visitors with around 16.3% of the workforce being employed in tourism related businesses. I think it is therefore safe to say that the city is likely to be around that level or perhaps slightly higher at present.
Of course, in the past year or so we have all become abundantly aware of the spiralling cost of living. As central government has within its tool chest some things to relieve the pressure on tourism and hospitality businesses so I asked some Brighton colleagues working in the industry for their thoughts on the Labour manifesto and what they’d like to see the government deliver in the coming years.
Hervé Guyat of New Steine Hotel is one of the city’s longest standing independent hoteliers and also chairs the trade group of small hotels. Through both roles, he has his ear to the ground in terms of the challenges facing the hotel sector in particular.
Jan Etches is the general manager of the Brighton Toy and Model Museum in Trafalgar Street. A champion of the city, Jan is leading on the Trafalgar Street Regeneration Project.
Seb Cole has run Boho Gelato in Pool Valley and Ship Street for over decade and is a well-known face on the local hospitality scene supplying his high quality ice creams and sorbets to both consumers and also restaurants across the region.
Julien Barnett is the owner of Gungho cocktail bar in Preston Street. A long-standing proponent of local and sustainable drinking, Julien has been awarded a clutch of national accolades including most recently the Sustainable Practices category at the prestigious Class Bar Awards 2024
Within the hospitality and tourism sector, the fall-out from curtailing freedom of movement – particularly for younger people wanting to live, work and study – has proved to have an on-going negative effect and one that everyone questioned wants resolving.
“We have been hindered by the barriers put up by Brexit in terms of the ability to employ young Europeans”, said Seb. “Recently we’ve missed out on opportunities to employ some really great people who would’ve brought not only knowledge and skills but also culture to our business. I’m hoping that the new government will recognise that the barriers which have been put up are not only unhelpful but also damaging to business”.
“Making it easier for students from Europe to do internships in the UK would be a massive benefit to us”, agreed Jan. “We used to have wonderful interns from the continent in the museum primarily during the summer months but also throughout the year”.
“We always had young Europeans coming to Brighton to improve their English and they mostly chose hospitality jobs”, said Hervé. “The ability to employ staff from Europe again would greatly benefit us”.
Although not unique to Brighton, transport issues continue to negatively impact on the industry. Whilst parking is predominantly the domain of the local authority, rail infrastructure investment and ensuring train company service and pricing levels are appropriate are the remit of central government.
“Parking is a big issue and always has been”, notes Hervé. “However the train strikes have been terrible over the past two years. How can guests rely on trains to visit us?”.
“Train disruption through strikes and engineering work – particularly at weekends and during school holidays – has really affected people's confidence in travelling by rail”, said Jan. “Even on either side of strike days people anticipate it will still impact on trains keeping to schedule. Sometimes people are reluctant to commit too far in advance to things in case there is a strike day. Resolving the long running disputes and giving travellers confidence in train services would be a real benefit".
Everyone I spoke to agreed that the Business Rates Relief for the past few years has assisted them continue trading.
“It is very important that we keep that as its helped us out a lot”, said Hervé.
“In the last few years we’ve benefited from retail relief which has saved us around 70% on our business rate bills”, said Seb. “I’m hoping the new government will not have the lack of judgement to remove this relief.”
However Julien from Gungho believes the business rate system needs revisiting.
“Business rates calculations have been broken for a long time and it is elating to see that in Labour’s manifesto this has been identified”, said Julien. “There are plenty of vacant restaurant and café units that are not being leased due to unreasonable business rate calculations. The cost of running a bar or restaurant these days is almost absurd and any steps to reduce business overheads will have an enormous impact”.
Every sector of the UK economy can provide arguments for why they should pay less VAT.
“I’ve maintained for many years that even a small cut to the rate of VAT for hospitality businesses would instantly give us the breathing room we need to be able to re-grow our businesses after the disruption we still feel from the pandemic”, said Seb. “The result would mean more employment which would benefit the local and national economy”.
“It would obviously be great to lower VAT but lets be realistic – its simply not going to happen”, said Hervé. “At the very least the new government should reintroduce Tax Free Shopping for overseas visitors to encourage them into retailers, restaurants and hotels”.
Julien is positive about the new government but is concerned about whether manifesto pledges can actually be delivered in practice.
“The new Labour government comes well received in my opinion; their manifesto especially regarding high street shops, business rates recalculation and apprenticeship levy should breathe some life back into independent businesses and the high street - which hopefully will bleed into aiding hospitality and tourism”, said Julien.
“Bars and restaurants generally sit alongside high street retail so I am particularly interested in how their 'community right to buy' plan will affect vacant shop units. Although I am skeptical on how this will be implemented, I am keeping the faith that this will allow community-built independent retailers to thrive against the march of the chains”.
Seb also points out the disparity of operating costs between bricks-and-mortar businesses on the high street and online retailers.
“I believe there is a huge imbalance between online and high street businesses and this needs to be addressed by premiums being charged to the online businesses which can be fed back into the high street”, said Seb. “Without a thriving city centre and seafront there will be no reasons for visitors to come to Brighton”.
Ultimately everyone I questioned came to the same conclusion that the cost of doing business at the present time is stifling growth.
“Wages and energy are the biggest costs to our business”, said Hervé. “I’d like to see a strategy to reduce the cost of inputs such as food and power”.
The new government certainly has its work cut out to face extreme challenges both domestically and internationally. The hope of the tourism and hospitality industry is that it is at the fore of strategy and fiscal planning – in return it will do what it does best and add a feel-good factor into people’s lives.
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