back to all industries

Hospitality Industry

The UK hospitality industry is a vital contributor to the economy, particularly in terms of employment, with small and medium-sized enterprises (SMEs) playing a significant role. SMEs constitute over 99% of businesses in the sector and generate more than half of the industry’s turnover and gross value added (GVA).

81%

81% increase in hotel deals agreed between H1 and H2 2023 which will positively impact transactional volumes during 2024 (HNR, 2024).

7%

Gen Z, one of the groups most affected by the living costs crisis – especially students – plan to increase their visits to pubs by 7% in 2024 (RSMUK, 2024).

41%

41% of affluent families surveyed indicated that they would seek out special offers and discounts to reduce their spending on eating out in the next six months, highlighting a significant interest in discounts within this demographic (RSMUK, 2024).

77%

77% of consumers and operators alike see value for money as imperative to decision-making when choosing where to eat and drink out (Morning Advertiser, 2023).

24%

A survey carried out by TLT shows that 24% of people ‘would look at the ethical and sustainable information’ available about dishes (Opsyte, 2024).

The hospitality industry makes a major direct contribution to the UK economy, particularly with regard to employment, given the labour-intensive nature of the businesses.

There is a high contribution of SMEs to the industry, which make up over 99% of the number of businesses, and over 50% of the total turnover and GVA of the industry. It should also be noted that hospitality is an important sector across every region in the UK, ranking as the second highest employer in some regions. When including in-house catering and temporary employment estimates, the wider hospitality sector is the third largest industry in terms of employment out of the Standard Industrial Classification’s 20 sectors. In terms of employment growth rates, it has outperformed both the economy overall, and the faster-growing services sector (Ignite Economics, 2023).

Industry Challenges

  • Ongoing battle with inflation impacting sales growth
  • Margins squeezed due to high energy costs despite relief in food and beverage costs
  • Business Rates Burden Exacerbation
  • Uncertainty in Disposable
  • Income and Consumer Confidence
  • Tax Staffing Pressures in Hospitality
  • Recruitment and staff retention

(RSMUK, 2024; Menzies, 2024; eZee Absolute, 2024)

The UK hospitality industry is an important contributor to the UK economy – especially in terms of employment. Unlike some industries that have a significant regional bias, the hospitality industry is a major employer across every region of the UK.

Hospitality ranks as a top 5 employer in every region of the UK, accounting for up to 11% of the regional workforce. However, recent cost pressures (minimum wage increases, business rates, underlying input cost inflation) and a reduction in the supply of labour have started to take their toll on the industry, leading to a significant slowdown in GVA growth (Ignite Economics, 2023).

Industry Opportunities

  • Cost Management
  • Talent Acquisition and Retention
  • Strategic Expansion Through Hotel Acquisitions: Unlocking Growth Potential in 2024
  • Distressed Property Acquisition

(RSMUK, 2024; RBH, 2023; Propeller, 2023)

Our clients in the industry