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

September 2015

The economic contribution of the UK’s hospitality industry

Matthew Dass

Key numbers for 2014 2.9 million

Jobs in the hospitality industry

9%

Share of UK employment

331k

Employment increase since 2010

£57 billion

Direct contribution to UK GDP

£143 billion

Total contribution to UK GDP, including multiplier effects

4.6 million

Total jobs supported, including multiplier 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

• Includes enterprises

that provide accommodation, meals and drinks in venues

• utside of the home
• These services are

provided to both UK residents and overseas visitors The hospitality industry

SIC 07 code Description 5510 Hotels and similar accommodation 5520 Holiday and other short stay accommodation 5530 Camping grounds, recreational vehicle parks and trailer parks 5590 Other accommodation 56101 Licensed restaurants 56102 Unlicensed restaurants and cafes 56103 Take away food shops and mobile food stands 56301 Licensed clubs 56302 Public houses and bars 5621 Event catering activities 5629 Other food service activities In-house catering in sectors outside the core hospitality 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

Total economic impact Induced impact

e.g. retail outlets, companies producing consumer goods and a range of service industries.

Indirect impact

e.g. manufacture of food & beverages, business services (such as advertising and market research), agriculture and communications.

Direct impact

e.g. Hotels and related activities, restaurants and related activities, catering and event management

…and across two key metrics

The contribution to the economy of each individual producer, industry or sector. Aggregated across all industries to form the basis of GDP

Gross value added contribution to GDP

Measured on a headcount basis and includes temporary or seasonal employment

Employment

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

500 1,000 1,500 2,000 2,500 3,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 000s Event management Hotel & related Catering Restaurant & related Source: BRES, LFS, Oxford Economics

Fig 1. UK direct hospitality employment – sub-sectors

331k increase 663k increase

The hospitality industry accounted for 17 per cent of total UK net employment growth between 2010 and 2014

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

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

• 400
• 200

200 400 600 800 1,000 Business services Hospitality Human health and social work Information and communication Other Education Transportation and storage Arts, entertainment and recreation Wholesale and retail trade Construction Manufacturing Financial and insurance activities Public administration and defence 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

1,000 2,000 3,000 4,000 5,000 6,000 7,000 Business services Wholesale and retail trade Human health and social work Hospitality Education Manufacturing Construction Transportation and storage Public administration and defence Information and communication Financial and insurance activities Arts, entertainment and recreation Other 000s Source: ONS, Oxford Economics

Regionally, London and the South East have the largest shares of UK hospitality employment

N.Ireland, 64,000 North East, 102,000 Wales, 124,000 East Midlands, 190,000 Yorkshire & Humber, 198,000 West Midlands, 216,000 East, 247,000 Scotland, 256,000 South West, 288,000 North West, 300,000 South East, 419,000 London, 517,000

Source: Oxford Economics Fig 5. Direct hospitality employment, 2014

Nonetheless, the hospitality industry makes an important contribution to employment across all regional economies

0% 2% 4% 6% 8% 10% 12% Source: Oxford Economics

Fig 6. The hospitality industry’s share of regional employment, 2014

The UK hospitality industry generated almost 4 per cent of total UK GDP in 2014

Fig 7. UK: Direct hospitality GVA – sub sectors

10 20 30 40 50 60 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 £bn 2011 prices Event management Catering Restaurant & related Hotel & related Source: ONS, Oxford Economics

£56bn

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

57 57 37 37 49 49 20 40 60 80 100 120 140 160 Direct Indirect Induced Total £bn 2011 prices

Source: Oxford Economics

£143bn

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

2,919 2,919 775 775 941 941 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Direct Indirect Induced Total 000s

Source: Oxford Economics

4.6 million

The future contribution of the UK hospitality industry

Fig 10. Employment forecasts for the UK hospitality industry to 2020

Hospitality industry is forecast to grow in line with Oxford Economics industry

• utlooks and visitor

forecasts

Under the baseline scenario, the hospitality industry is forecast to grow to 3.3 million direct jobs by 2020

2,000 2,200 2,400 2,600 2,800 3,000 3,200 3,400 000s 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

The number of

• verseas and UK

visitors is 20 per cent higher than in the baseline

2,000 2,200 2,400 2,600 2,800 3,000 3,200 3,400 3,600 000s Baseline High Source: BRES, LFS, Oxford Economics

Questions?