IN MY OPINION: Institute of Management companion Tim Ingram Hill, chairman of Ingram Hotels, explains how the hospitality industry can overcome its problems

IN MY OPINION: Institute of Management companion Tim Ingram Hill, chairman of Ingram Hotels, explains how the hospitality industry can overcome its problems - It is a difficult time to write this article in the period following the terrorist attacks in Am

by TIM INGRAM HILL
Last Updated: 31 Aug 2010

It is a difficult time to write this article in the period following the terrorist attacks in America. As the world awaits the repercussions of this appalling action it seems a small thing to bewail the difficulties faced by the UK hospitality industry with the continuing outbreak of foot-and-mouth.

The hotel and catering industry is not unused to challenges, and each year tends to pose its own special problem. Earlier this year, as the effect of foot-and-mouth closed the countryside and the expected start to the Easter season did not materialise, there was talk of a recession in the US and a decline in overseas visitors. The industry has spent the past few years reshaping itself with Big is Beautiful, as the large corporates bought and sold various companies to achieve efficiencies, and presumably profitability. It was ready to reap the benefits this season.

Now we must factor in the effect of terrorism on the decline already forecast in overseas visitors for the next 18 months. Fortunately, the British have a well-deserved reputation for 'getting on with it'. The first response to foot-and-mouth in February, when it was known that we had a serious epidemic on our hands, was of sympathy for the agricultural community. The Government stepped in and took action to halt the disease. Although this was largely to preserve existing farming practices, it had an enormous and detrimental effect on the more important tourism economy.

The UK agricultural sector has a turnover of pounds 5 billion a year and employs 11,000 people. The hospitality industry has a turnover in excess of pounds 50 billion and employs about 2 million people. In a recent report on foot-and-mouth by the Countryside Agency, it was found that 80% of accommodation providers were affected; 11% of hotels said that business had dropped by more than half in the first two months of the crisis. The outbreak had caused a loss in tourism of up to pounds 2.3 billion. It forecasts that the disease will have destroyed up to pounds 4.1 billion of economic output by the end of the year. A quarter of UK businesses will have been affected, from agriculture to tourism.

Another report by Lloyds TSB, 'Counting the Cost of Foot and Mouth', found that more than 80% of the hospitality industry in the UK had been affected and more than one in three of those had lost more than pounds 50,000 as a direct result.

It is agriculture, however, that has received substantial compensation. Farmers have been paid more than pounds 1.1 billion as a result. Yet the Government has granted just pounds 3.8 million to the English Tourist Council and announced pounds 12 million to help the tourism industry in early May. This is pathetic for such a significant contributor to the British economy.

As businesses go into bankruptcy, we need support and help. It is not a case of giving money to struggling companies but a willingness on the part of the Government to promote the industry abroad and a recognition that this sector is important to the UK economy.

The hospitality industry is dominated by small entrepreneurial employers, who are supplied by a substantial number of other small businesses. The decline of one small catering operation has repercussions on many people. A major part of the rural community depends on these small businesses, and this is especially true in the context of a decline in agriculture. So this current crisis has an effect on more than just farmers and their families.

Foot-and-mouth has not totally lost us occupancy. Visitors have transferred from the countryside to the coast, towns and cities. The Welsh Tourist Board reported that there has been an 8% decline in rural areas, while visits to towns and cities increased by 8%. However, foot-and-mouth is not the only threat - the English Tourist Council has warned that tourists will desert the UK unless transport is improved.

The increase in traffic congestion may well force people overseas. The problem of transport applies to all forms of business in the UK, and the lack of good public services in rural areas only adds to the misery.

Why do we not have a Secretary of State for Tourism? This demonstrates the low priority that the Government attaches to us. As the manufacturing industry has declined, so has the hospitality industry increased. The greater amount of leisure time and an increase in disposable income has created an opportunity for consistent long-term growth for the sector.

Unfortunately, the tragic events of this year have conspired to prevent the industry from enjoying these benefits, and it seems that one crisis is to be followed by another.

Next year is the Queen's Jubilee, which presents a great opportunity to promote Britain as a tourist destination worldwide. Let us be positive about the way ahead. Let us accept that travellers are volatile and tourists can be easily frightened off and can cancel at a moment's notice. Once foot-and-mouth has been controlled, let us promote the excellent facilities and services we can offer and remain positive that our visitors will return.

We must, therefore, actively sell ourselves as the country to visit. So we look to Government to help us put the Great back in Britain.

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