Growing number of people and skills shortages in hospitality

The people and skills crisis in hospitality and catering continues to grow, as the latest figures from the ONS confirms 176,000 unfilled job vacancies across the industry.

A growing number of businesses are being forced to limit opening times as a consequence the shortages.


A report from industry body UKHospitality and business property firm Christie & Co revealed that operating costs in the sector have risen to 55.2% of annual turnover before rent - the highest level since 2007.


The Bristol Hoteliers Association (BHA) chair Raphael Herzog said hotels are "still a long way from recovery" following the pandemic as they battle with the increased costs of food supplies and soaring energy prices. In June, UK inflation hit a 40-year high of 9.4%, leaving some South West firms concerned they could go bust.


Mr Herzog said some hotels in Bristol were seeing gas bills rise from £10,000 to £12,000 a month - to around £50,000 - and the price of "quality steak" had increased from £5.50 to £10.


According to Mr Herzog, the industry has seen year-on-year price increases of nearly 40% for bakery and flour purchases, more than 60% for dairy, more than 45% for eggs and egg products, and 20% for laundry.


“These are just a few examples of the soaring costs we are facing and why we are calling for long-term government help," he explained.


In July 2020, the government announced a temporary 5% reduced rate of VAT to certain supplies relating to hospitality, hotel and holiday accommodation, and admission to certain attractions.


The reduced rate was initially introduced to last for a temporary period between July 15, 2020, and January 12, 2021, and was later extended to March 31, 2021. In the Spring Statement last year, then-Chancellor Rishi Sunak confirmed the temporary reduced rate would be extended until September 30, after which it would rise to 12.5% until March 2022 when it would return to 20%.


Mr Herzog said many hospitality businesses in the region have been unable to open fully since the pandemic due to staff shortages, with some kitchens staying closed completely.


“We will soon have a new Prime Minister and we are hoping that he or she will look to re-introduce a reduced rate of VAT for hospitality businesses," he continued.


“This would be a significant step towards supporting struggling hotels, restaurants, pubs and others. We are all facing soaring operating costs at a time when many household budgets are being stretched and more and more people are finding it harder to afford to be able to enjoy all that the hospitality sector has to offer."


Mr Herzog said the government needed to reintroduce the reduced rate of VAT – "at least temporarily but ideally on a permanent basis".


He added: "Right now we have very little revenue, increases in costs and continuing staff difficulties. It’s very hard to operate a business in the current climate, with more money going out than coming in.


“We need more support, not only from the government, but from other companies and customers to help with our long-term recovery from the impact of the pandemic.”


Source: Business Live