The Importance of the hospitality and catering industry on the UK economy

Hospitality is growing again.

The hospitality industry is the third largest employer in the entire nation and, with the right government support, is on track to generate over 500,000 more jobs by 2027. As one of the fastest growing industries in the UK, hospitality is a force to be reckoned with; and now is as good a time as ever for young people to consider entering the hospitality workforce.

The industry often falls victim to underestimation; however, it is based on the most fundamental of human needs: to eat and to socialise. It is so relevant, in fact, that hospitality ranks as a top five employer in every region of the UK.

The hospitality and catering industry also creates jobs in remote regions of the country where there otherwise wouldn’t be many employment options.

For example, the South Western Coast or the Lake District are naturally beautiful areas that attract tourists by default, so hospitality and catering businesses double down on this steady stream of spending by encouraging visitors to spend more and boosting the local economy as a result.

In these regions where other employment options aren’t so readily available, hospitality provides great opportunities for people of all ages and helps combat unemployment rates.

Hospitality and catering businesses also recruit a significant number of young people aged 16-25, as the roles don’t often require highly specialist skills or years of experience. This supports a reduction in youth unemployment which could otherwise have a negative impact on the nation’s economy.

Hospitality is a solid entry level industry for Gen-Z as it provides crucial transferable skills, priming them for the workforce: resilience, communication and the ability to collaborate effectively within a team just to name a few. Attracting and nurturing Gen-Z hospitality staff is crucial to ensure the industry remains skilled, diverse and profitable; check out our previous post for some further insight.

Hospitality. It’s a money-making machine!

The growth doesn’t end with employment rates; according to UK Hospitality, the industry is growing at almost double the speed of the economy, generating £93 billion, annually, to the UK economy. And, with favourable conditions it is hoped that the industry could further increase its economic contribution by £29 billion by 2027.

Hospitality in London has been described as “world-leading”, with a staggering £46bn made in revenue in 2023, in London alone.

With such a remarkable bounce-back from the pandemic, London’s hospitality sector is actually leading the economic recovery of the capital.

The Mayor of London commented that it shows “phenomenal resilience in London hospitality”.

This may ease the minds of young people looking to enter the workforce who, since the pandemic, have valid concerns about job security and longevity. Not only that, but those working within the industry already can take pride in the fact that their work is partly responsible for the revival of the capital’s economy.

Contributing a significant amount of tax annually, the hospitality industry is also therefore partially responsible for funding public services and numerous government-backed schemes. This supports the economy on both a local and national scale, as well as supporting communities and the general well-being of the UK.

The huge role of the SME

According to UK Hospitality, 99% of hospitality and catering businesses are SMEs (small to medium enterprises), which are vitally important to the UK economy.

Most notably, SMEs make up 25% of the UK’s GDP - however this statistic does of course take into account small businesses not in the hospitality sector.

SMEs offer a fantastic diversity within the hospitality space from a privately owned local pub to a diverse range cuisines from around the world.

Small hospitality businesses are also incredibly important in remote communities with smaller local economies. SME owners are more likely to spend their money with fellow SME businesses, recirculating money back into these local economies rather than being absorbed by large franchises.

Furthermore, small hospitality businesses are often more agile and adaptive to cope with changes in the local and national economy.

The dovetail of Hospitality & Tourism

Travel and tourism is the big sister of hospitality, contributing£237.1bn to the UK’s GDP in 2022. The two industries go hand-in-hand; travellers come for cultural attractions and stay for the hospitality scene.

Tourism relies on a robust and accommodating hospitality industry, meanwhile restaurants rely on a rich, consistent customer base which expands beyond locals. Frequent visitors to the UK expose high-performing restaurants, bars and clubs to a global audience, encouraging return visits to the country.

Without tourism and hospitality, it’s safe to say that the UK wouldn’t have as rich a culture as it does today, not to mention a much less healthy economy.


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At Classeq, we are passionate about the growth and success of the hospitality sector. That’s why we are committed to providing you with content that explores every juncture of the hospitality journey from the distribution of catering equipment right through to the patron’s plate.

If there is a topic you’d like us to explore further, do let us know. Otherwise, view our full content library here, or speak to a member of the team today . Whether it’s a new machine you need, or technical support, our team is ready to assist.


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References

https://www.thecaterer.com/news/hospitality-boost-economy-government-support-ukhospitality
https://www.classeq.co.uk/news/is-catering-and-hospitality-a-career-choice-for-gen-z
https://www.ukhospitality.org.uk/insight/economic-contribution-of-hospitality/
https://www.classeq.co.uk/news/working-with-nurturing-and-retaining-apprentices-and-gen-z-staff
https://www.london.gov.uk/new-data-shows-londons-world-leading-hospitality-industry-and-livemusic-events-defied-all
https://www.ukhospitality.org.uk/insight/economic-contribution-of-hospitality/#:~:text=The%20sector%20is%20almost%20all,up%2099%25%20of%20the%20sector.
https://www.dlaccounts.co.uk/blog/the-crucial-role-of-smes-in-the-uk-economy/#:~:text=Creating%20jobs&text=The%20employment%20rate%20is%20a,spending%20and%20general%20economic%20activity.
https://www.statista.com/topics/3269/travel-and-tourism-in-the-united-kingdom-uk/#statisticChapter
https://www.classeq.co.uk/news/