Summary
Current contribution The core hospitality economy today (2010 estimate) has an estimated turnover of £90 billion and is worth £46 billion to the UK economy in GVA (wage and profits) terms1, and directly contributes 2.44 million jobs (1 in 13 of total jobs), and over 1.2 million jobs through multiplier effects [the sum of indirect (supply chain) and induced (direct and indirect employee-spend related) employment).
675,000 of the multiplier jobs are via supply-chain purchases, with two-thirds of these in three sectors – manufacture of food, beverages & tobacco, agriculture and business services.
With 2.44 million direct jobs representing just below 8% of total employment, this makes the hospitality economy the UK’s 5th biggest industry in employment terms, ahead of other broad sectors such as financial service, transport & communications and construction, and similar in scale to education. The 2.44 million jobs include an estimate of employment in in-house catering across non-hospitality sectors (377,000 jobs) and temporary agency employment in hospitality (167,000 jobs). (Note the ranking of industry contributions, when measured in GVA terms, is not the same due to differences in sector productivity levels)
The core hospitality economy is estimated to directly contribute £34 billion in tax revenue to the Treasury, which includes, among other tax categories, VAT on sales, excise duty on ‘on-site’ alcohol consumption, corporation tax, income tax and national insurance contributions. This is equivalent to just over 6% of total Exchequer annual tax receipts.
Estimates of exports, or attributable in-bound spending from core hospitality, indicate that the industry accounts for £7.4 billion of foreign exchange export earnings, which represents 1.8% of total export earnings. Clearly there is overlap here with tourism’s contribution to export earnings. Overseas visitor spend in 2010 in the UK is estimated at £16.9 billion (this includes spend on visitor attractions etc which do not fall under the definition of hospitality). The ratio of hospitality to tourism in-bound spend is broadly in line with, for example, the hospitality sector share of overseas’ visitor spend, according to both the Department for Culture, Media and Sports (DCMS) First Steps Tourism Satellite Accounts and BHA data for 2008.
On average, 4.2% of total investment in the economy is made by the hospitality economy, helping to sustain 61,000 jobs, with 39,000 of these jobs in construction and related activities (e.g. plumbing, plastering, lift installation etc). This share and level of investment will of course vary over time in line with wider economic and specific industry conditions and prospects. Note these jobs are in addition to the sum of the direct 2.44 million and multiplier 1.2 million jobs described above.
1
2005 constant prices
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