Labor, business rates key election issues for UK hotels
 
Labor, business rates key election issues for UK hotels
20 NOVEMBER 2019 9:36 AM

The United Kingdom hotel industry has its work cut out as the country prepares for a general election obsessed with Brexit, with UKHospitality officials arguing that sound policies on labor and business rates are needed for British public companies to retain their global standing.

LONDON—Business-rate relief and revision, and a sound immigration policy that allows hotels and the hospitality industry to recruit and retain those it needs to continue to grow, are the two central demands of UKHospitality, the principal membership organization in the United Kingdom.

Speaking at its 2019 general election manifesto launch titled “A menu for change” on 19 November—just 23 days before British voters go to the polls—Kate Nicholls, UKHospitality’s CEO, said the body is working with the major political parties and is focusing on “longer-term documents, over the next Parliament, if we ever get past Brexit.”

The general election—which is said to be a direct result of no Brexit agreement being passed in Parliament—comes 30 months after the last, which provided the ruling Conservative Party a slim majority but only by creating an alliance with Northern Ireland’s Democratic Unionist Party.

That majority has since been whittled away.

Nicholls said she is committed to working with the next government and all political parties to underline the importance of the hotel industry to the country. She said she is heartened by talk of pledging assistance to communities and economies that have been left behind, such as seaside towns that still have a notable hotel and tourism infrastructure.

UKHospitality’s three focus policies are:

Unlock economic growth: Rebalancing the business tax burden to reflect the modern digital economy by reforming the business rates system.
Boost skills and opportunities for the workforce: Boosting take-home pay for hospitality’s hardworking team members by removing the lowest paid from tax, doubling employer NIC thresholds and investing in training.
Bringing communities together: Delivering on the tourism sector deal and supporting tourism enterprise zones to unlock the potential of the sector as an employer and incentivize infrastructure investment.

Nicholls said the industry’s position has been strengthened since late June when the government announced that tourism and hospitality, including hotels, as one of only a handful of industries to be given special focus, something known as a sector deal.

But with Brexit the major talking point and voting focus, Nicholls said she and her team know that lobbying and relaying its messages remain critical.

“(Small- and medium-size enterprises), many of which are hotels and restaurants, are one of the touchstones, the life and blood of communities,” Nicholls said. She added that once the Brexit “conundrum” has been sorted, it is urgent the next government concentrates on “investment, infrastructure, upskilling and spreading opportunities.”

Nicholls pleaded with political parties to “work with us.”

That work would concentrate in part on the revision of business rates, which Nicholls said fall disproportionately heavily on hospitality enterprises.

“Businesses are penalized with higher bills when they improve their premises. … Margins (in the industry) have shrunk by one-third, and that affects capital input,” she said.

Nicholls said UKHospitality realizes it needs to keep its discussions and lobbying “top line and on the big issues.”

“Tourism is vital. We are one of the industries that can feed the people,” she said.

She added that the sector generates £130 billion ($167.6 billion) in annual turnover, or 5% of gross domestic product, and £39 billion ($50.3 billion) in annual tax revenue. It employs 3.2 million people and is the third largest private sector in the country.

Nicholls said UKHospitality also is asking for an employment and migration policy that works for the industry and addresses labor shortages.

The hotel industry, with many of its employees earning near to the bottom of pay scales, would suffer if salary requirements were imposed before foreign employees could legally transfer to the U.K., she said.

“There is an acute labor shortage, and that squeeze is to continue to 2030,” Nicholls said.

One in eight employees (some 400,000 people) in the hospitality industry is a European Union national, she said. That percentage is probably higher in the hotel industry.

A situation in which definite job offers would have to be signed before a foreign national can take up his or her role in the U.K. would be “crippling for us, as the costs to us will be too high and there is no predictable demand,” Nicholls said.

She said another focus will be to continue to work with domestic employees and develop home-grown talent via apprenticeships.

Nicholls said she does not know what a change of government will do for the industry’s sector, even though she added she presumes it would not change under a Conservative government, but even then there are no guarantees.

“Any new budget would have to provide breathing room for tax cuts to see (businesses through), especially for customer-facing businesses,” she said.

The worst-case scenario is for there to be more uncertainty, Nicholls said.

“Tourism is a show window for all U.K. businesses. I believe the government is aware of this and not complacent about international tourism numbers. But protracted uncertainty will lead to a decline in the perception of the U.K. and therefore a decline in social capital,” she said.

Also present at the manifesto launch was David Sheen, public affairs director at UKHospitality, who said his team has compiled a breakdown of hotel and hospitality employment in every one of the U.K.s’ 637 constituencies, each of which will return a Member of Parliament.

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