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Sector Information

People 1st is the Sector Skills Council representing the hospitality, leisure, travel and tourism sector. The sector comprises:

  • food and service management
  • gambling
  • hospitality services
  • hotels
  • pubs, bars and nightclubs
  • restaurants
  • self-catering accommodation, holiday centres and youth hostels
  • travel and tourist servicesvisitor attractions

The sector as a whole has grown over the last 20 years and, despite the current recession, is predicted to continue to grow in the medium to long term. The sector as a whole currently employs almost 2 million people. The sector is a significant employer across the UK, particularly in areas highly dependent on tourism.

The sector accounts directly for approximately 4.5% of the UK’s economic output, and has an indirect contribution of the ‘visitor economy’ to the UK’s Gross Domestic Product estimated to be 8.2% (approximately £114 billion).

Whilst less than 1% of sector businesses are large (employing more than 250 people), 43% of the workforce work for these large businesses. 71% of sector businesses are Small and Medium-sized Enterprises (SMEs). 53% of the workforce work for SMEs. 29% of all businesses are owner operated without staff. ‘Chains’ are prevalent in certain sub-sectors (such as budget hotels, high street restaurants and betting shops), whilst Asian restaurants, self-catering accommodation and B&Bs are most likely to be run by independent operators. Many accommodation, restaurant, pub and travel agency owners/managers are self-employed, as are many tourist guides.

The total number of hospitality, leisure, travel and tourism establishments in Great Britain rose from 170,000 in 1998 to 193,600 in 2008, a rise of 12%. The number of restaurant, food and service management and gambling establishments grew considerably whilst the number of pubs, bars and nightclubs, travel and tourist services establishments and hotels fell.

Source: Sector Skills Assessment for the UK Hospitality, Leisure, Travel and Tourism Sector 2010 and People 1st LMI report March 2010


Employment

Many jobs within the sector are flexible in nature and commonly attract students, women wishing to work on a part-time basis, and workers from overseas (particularly Eastern Europe). The sector employs a very young workforce with approximately 1 in 6 being under the age of 20 and a further third aged between 20 -29 years.

Of those employed in the hospitality, leisure, travel and tourism sector in the UK:

  • 87% are employed in the hospitality industry (which includes: restaurants; hospitality services; pubs; bars and nightclubs; hotels; food and service management; holiday centres; self-catering accommodation; and youth/backpacker hostels)
  • 6% in the travel and tourist services
  • 5% in gambling
  • 1% in the ‘organisation of conventions and trade shows’ element of the events industry
  • 1% in visitor attraction/theme park

45% of the hospitality, leisure, travel and tourism workforce is employed on a part-time basis and 8% on a temporary basis. This varies across the sector with part-time work being more prevalent in the hospitality industry (47%) and less common in the gambling (30%) and travel (26%) industries. Approximately 9% of the hospitality, leisure, travel and tourism workforce is self-employed.

The sector has traditionally suffered from perceptions of low wages, unsociable hours and poor conditions, which can make it difficult for employers to attract talent. Within many businesses, there are opportunities for competent staff to be promoted quickly and increase their pay accordingly.

The sector suffers from the highest rate of labour turnover of all sectors of the economy. This is partly due to a reliance on a transient workforce of students and overseas workers. The constant need to replace leavers and a high levels of skills gaps.

Source: Sector Skills Assessment for the UK Hospitality, Leisure, Travel and Tourism Sector 2010

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Future employment

Employment in the hospitality, leisure, travel and tourism sector is forecast to increase from 2,203,000 in 2007 to 2,411,000 in 2017. When replacement demand is taken into account, the projections indicate that a total of 1,063,000 additional people will be required to work in the sector between 2007 and 2017. In terms of numbers, the greatest growth will be in managerial and elementary positions.

Evidence from the national and trade press suggests that, in the short-term at least, employment is set to grow amongst budget operators (such as fastfood, takeaways and cafes) and fall in mid-range hotels and restaurants. Employment in the pub industry is likely to continue to fall but to a lesser extent than has been the case over recent years.

Source: Sector Skills Assessment for the UK Hospitality, Leisure, Travel and Tourism Sector 2010 and Working Futures 2007-2017

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Drivers of change

The economy

Despite the UK emerging from recession, 2010 looks like continuing to be a challenging year for many businesses within the sector. However, growth for the sector in the medium to long term is forecast. Economic challenges affecting many sector businesses over the last 12 months have included:

  • Declining custom (leisure and business)
  • Reduced consumer expenditure
  • Rising costs (i.e. fuel, food, wages)
  • Compliance with new legislation such as licensing laws (mainly in terms of the time taken to understand the implications of changes)
  • Changes in exchange rates

Implications for skills

  • Address the shortage of skilled chefs
  • Increase standards of management and leadership
  • Improve customer service skills
  • Multi-skilling (as businesses make job cuts or decide not to replace staff who leave, there is likely to be a need for remaining staff to undertake tasks for which they were previously not responsible)
  • Entrepreneurialism (as the need to reduce costs and maximise profit becomes paramount)
  • Marketing and sales (businesses need to think of more innovative ways of attracting and retaining customers)
  • Waste management (as saving energy can both reduce costs and improve green credentials)

Consumer demands

Most sector businesses recognise the need to address, meet and exceed rising customer expectations. Skilled and motivated managers and staff are crucial to ensuring that consumer demands are met and exceeded.

Government policy

The main ways in which government drives change within the hospitality, leisure, travel and tourism sector are through:

  • Legislation (such as health and safety, the Gambling Act and the Licensing Act)
  • Criteria regulation (such as only certain occupations being listed on the Home Office’s Shortage Occupation List enabling employers to recruit people from outside the EEA to fill roles)
  • Promotion (sector businesses operating within the tourism industry are promoted by the likes of VisitBritain, Visit England, Visit Scotland, Visit Wales and the Northern Ireland Tourist Board)

Government policy on immigration has significant implications for the sector, particularly the hospitality element. Traditionally, the hospitality sector has sourced some of its workforce overseas.

Demographics

The sector currently employs a very young workforce. However, the UK has an ageing population, so both consumers and the workforce is ageing. This has implications for employers in terms of their products and services, marketing, recruitment and training.

Globalisation

From a tourism perspective, some businesses work hard to market themselves overseas and provide tailored services to overseas visitors (such as providing information in different languages). The London 2010 Olympic and Paralympic Games will provide the more opportunities for business. Skills for which is likely to be increased demand for include: disability awareness; English language; communication; and foreign language skills.

Technology

Key technological changes affecting the industry include:

  • The growing use of the internet to purchase goods and services
  • Faster broadband technologies (enabling customers to quickly download videos of hotels for example)
  • The growing popularity of User Generate Content (UGC) websites (such as Tripadvisor)
  • Advances in mobile phone technology
  • The use of database mining techniques to target consumers
  • The use of social networking websites as marketing tools

Sustainability

The response of sector businesses to the threat of climate change varies by industry. Those within the hotel industry appear to have invested most heavily in environmental cost savings and some hotel groups have appointed sustainability managers. Those within the travel industry are most likely to see climate change as a threat, as it is likely to have severe implications for air travel in the future.

Source: Sector Skills Assessment for the UK Hospitality, Leisure, Travel and Tourism Sector 2010

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