hospitality industry Matthew Dass September 2015 Key numbers for - PowerPoint PPT Presentation

The economic contribution of the UK’s hospitality industry Matthew Dass September 2015

Key numbers for 2014 £57 2.9 Direct contribution to Jobs in the hospitality billion UK GDP million industry Total contribution to 9% £143 UK GDP, including Share of UK employment billion multiplier effects Total jobs supported, 4.6 331k including multiplier Employment increase since million 2010 effects

Introduction

Study objectives Assess the economic contribution of the hospitality industry up to 2014 Consider the potential future contribution of the hospitality industry

Definition of the hospitality industry SIC 07 code Description 5510 Hotels and similar accommodation The hospitality industry 5520 Holiday and other short stay accommodation Camping grounds, recreational vehicle parks and trailer 5530  Includes enterprises parks that provide 5590 Other accommodation 56101 Licensed restaurants accommodation, meals 56102 Unlicensed restaurants and cafes and drinks in venues 56103 Take away food shops and mobile food stands outside of the home 56301 Licensed clubs  These services are 56302 Public houses and bars 5621 Event catering activities provided to both UK 5629 Other food service activities residents and overseas In-house catering in sectors outside the core hospitality visitors industry 8230 Convention and trade show organizers 7810 Share of activities of employment placement agencies 7820 Share of temporary employment agency activities

The study assesses the economic impact of the hospitality industry across three channels Direct impact e.g. Hotels and related activities, restaurants and related activities, catering and event management Indirect impact Induced impact e.g. manufacture of food & beverages, e.g. retail outlets, companies business services (such as advertising producing consumer goods and a and market research), agriculture and range of service industries. communications. Total economic impact

…and across two key metrics Gross value added Employment contribution to GDP The contribution to Measured on a the economy of each headcount basis individual producer, and includes industry or sector. temporary or Aggregated across all seasonal industries to form the employment basis of GDP

The direct economic contribution of the UK hospitality industry

In 2014 the UK hospitality industry directly provided 2.9 million jobs, equivalent to 9 per cent of total UK employment Fig 1. UK direct hospitality employment – sub-sectors 000s 3,000 2,500 2,000 331k increase 1,500 1,000 663k increase 500 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Event management Hotel & related Catering Restaurant & related Source: BRES, LFS, Oxford Economics

The hospitality industry accounted for 17 per cent of total UK net employment growth between 2010 and 2014 Fig 2. Growth of direct hospitality and whole economy employment in the UK 1998=100 135 130 125 120 115 110 105 100 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Hospitality Whole economy Source: BRES, LFS, Oxford Economics

Between 2010 and 2014, business services was the only sector to create more jobs than hospitality Fig 3. UK employment growth 2010-2014, by industry Public administration and defence Financial and insurance activities Manufacturing Construction Wholesale and retail trade Arts, entertainment and recreation Transportation and storage Education Other Information and communication Human health and social work Hospitality Business services -400 -200 0 200 400 600 800 1,000 000s Source: ONS, Oxford Economics

The hospitality industry is the UK’s fourth biggest industry in employment terms Fig 4. Industry comparison – UK employment 2014 Other Arts, entertainment and recreation Financial and insurance activities Information and communication Public administration and defence Transportation and storage Construction Manufacturing Education Hospitality Human health and social work Wholesale and retail trade Business services 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Source: ONS, Oxford Economics 000s

Regionally, London and the South East have the largest shares of UK hospitality employment Fig 5. Direct hospitality employment, 2014 N.Ireland, 64,000 North East, 102,000 Wales, 124,000 East London, 517,000 Midlands, 190,000 Yorkshire & Humber, 198,000 South East, 419,000 West Midlands, 216,000 East, 247,000 North West, 300,000 Scotland, South West, 256,000 288,000 Source: Oxford Economics

Nonetheless, the hospitality industry makes an important contribution to employment across all regional economies Fig 6. The hospitality industry’s share of regional employment, 2014 12% 10% 8% 6% 4% 2% 0% Source: Oxford Economics

The UK hospitality industry generated almost 4 per cent of total UK GDP in 2014 Fig 7. UK: Direct hospitality GVA – sub sectors £bn 2011 prices £56bn 60 50 40 30 20 10 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Event management Catering Restaurant & related Hotel & related Source: ONS, Oxford Economics

Total economic contribution of the UK hospitality industry

Including multiplier effects, the total GDP contribution of the hospitality industry in 2014 is estimated to have been £143 billion Fig 8. The total GVA impact of the hospitality industry, 2014 £bn 2011 prices 160 £143bn 140 120 49 49 100 80 37 37 60 40 57 57 20 0 Direct Indirect Induced Total Source: Oxford Economics

The hospitality industry supported employment for an estimated 4.6 million people, including multiplier effects Fig 9. The total employment impact of the hospitality industry, 2014 000s 5,000 4.6 million 4,500 941 941 4,000 3,500 775 775 3,000 2,500 2,000 1,500 2,919 2,919 1,000 500 0 Direct Indirect Induced Total Source: Oxford Economics

The future contribution of the UK hospitality industry

Under the baseline scenario, the hospitality industry is forecast to grow to 3.3 million direct jobs by 2020 Fig 10. Employment forecasts for the UK hospitality industry to 2020 000s Hospitality industry 3,400 is forecast to grow in line with Oxford 3,200 Economics industry outlooks and visitor 3,000 forecasts 2,800 2,600 2,400 2,200 2,000 Source: BRES, LFS, Oxford Economics

Under high scenario, hospitality could create 524,000 net additional jobs over 2014-2020 Fig 11. Employment forecasts for the UK hospitality industry to 2020 000s The number of 3,600 overseas and UK visitors is 20 per 3,400 cent higher than in the baseline 3,200 3,000 2,800 2,600 2,400 2,200 2,000 Baseline High Source: BRES, LFS, Oxford Economics

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