By Giles Fuchs.
Few industries reflect Britain’s character quite like hospitality. It is how we welcome and how we share our sense of place with the world. Before the pandemic, the sector employed more than 3.5 million people and contributed around £93 billion to the economy each year. Today, it is fighting to stay afloat. Energy bills have surged, food prices continue to rise, and the costs of employment have climbed higher still.
Many hotels, pubs and restaurants are working harder than ever, only to watch their profits disappear. Yet in the face of such adversity, the sector continues to show remarkable resilience, innovation and spirit.
Businesses that survived the pandemic now face a new and more complicated battle: high inflation, staff shortages and a tax system that seems blind to the realities of running a service-based industry. These pressures have weakened balance sheets and begun to erode confidence. Yet the solution is within reach. Hospitality does not lack ambition or ingenuity – it simply needs the right conditions to thrive once more. By combining sustainable operations, investment in people and fairer government policy, we can restore stability to one of Britain’s most important industries.
Sustainability and people: investing in the future
Energy is where the pressure is most acute, but also where considerable opportunity lies. Many hotels now spend more than ten per cent of their turnover on energy alone. At Burgh Island Hotel, we tackled this head-on by installing solar panels and improving waste efficiency, reducing energy consumption by almost a third within two years. Across the wider industry, similar changes could cut average energy costs by as much as twenty to twenty-five per cent, according to industry estimates.
Sustainability now underpins commercial resilience. It helps businesses control costs, reduce exposure to volatility and remain competitive. The government can support this transition by extending green investment relief to hospitality, allowing smaller operators to make long-term changes that would otherwise be out of reach. Such measures would not only cut emissions but also drive local growth and employment.
People are equally central to recovery. Since last autumn, hospitality has lost around eighty-four thousand workers, while wage and tax increases have pushed up costs for those who remain. The sector cannot function without its workforce, and for too long it has struggled to attract and retain talent. At Burgh Island, we have invested in proper accommodation, fair pay and structured training, alongside wellbeing initiatives that improve morale and retention. These are not costs but investments that pay back in loyalty, service quality and reputation.
Across the country, a coordinated approach to skills development is needed. A national hospitality academy, supported by both government and industry, could help redefine hospitality as a skilled and respected profession. Digital learning and flexible training models would open doors to a broader and more diverse workforce. At the same time, immigration policy must reflect economic reality to ensure that vital international talent remains part of Britain’s hospitality story.
A better experience, a fairer system
The cost-of-living crisis has made consumers more selective about where they spend their money. To remain competitive, hotels and restaurants must offer more than comfort or good food – they must offer something authentic and memorable. At Burgh Island, our heritage, sustainable ethos and service combine to create a distinctive experience that continues to attract guests. That combination of character and care is what will define success in the years ahead.
But innovation alone cannot overcome structural pressures. Employers now pay fifteen per cent in National Insurance, business rates remain among the highest in Europe, and VAT relief has been withdrawn. For many operators, close to half of turnover is lost to taxes and utilities before profit. No industry can sustain long-term growth under that weight.
Reform is essential. Reducing business rates, reinstating a lower VAT rate for hospitality and freezing employer National Insurance contributions until inflation stabilises would provide immediate relief and encourage reinvestment. These are not subsidies, but practical economic measures that will generate more in growth, employment and tax revenue over time.
A national asset worth protecting
British hospitality is an institution worth protecting. It is part of our national identity and enriches every community it serves. The current crisis should not signal decline but renewal. With pragmatic support and a focus on sustainability, skills and fair policy, the industry can once again become a cornerstone of a thriving economy.
Hospitality does not ask for rescue – only recognition of its value and the tools to continue contributing to Britain’s success. If we act now, we can ensure that the industry not only survives but flourishes, sustaining livelihoods, local economies and the spirit of welcome that Britain is known for.
