The role of industry bodies has never been more important – and it has also never been more crucial for hospitality to have a voice. SUSAN YOUNG talks to LEON THOMPSON (right) who took over the Executive Director role at UKH just over a year ago, and CHRIS WAYNE WILLS, (left) who took on the Scottish Chairmanship in June.
It is always nice to have a drive to Loch Fyne and this is where I caught up with Chris Wayne Wills who, in his day job, is Chief Executive Officer of Crerar Hotels, so it was fitting we met at one of his hotels the Loch Fyne Hotel & Spa at Inveraray.
Inveraray is a prime example of a town which depends on tourism and hospitality and which is facing many of the challenges we are here to talk about.
Chris Wayne-Wills took over the Chair of UKH Scotland from Calum Ross of Loch Melfort Hotel, who carried the chairmanship for 11 years. While Leon, prior to joining UKH in a full-time capacity was the Government and Parliamentary Affairs Manager at Visit Scotland.
At the root of many of the issues facing hospitality is the fact that politicians fundamentally don’t understand the industry. We discovered this to our cost during the pandemic, and it seems like even now they don’t get it.
Chris explains, “If you look at the background of our politicians you will find they are very focussed on social policy but they are not necessarily making the link between business and jobs. Being able to deliver the social policy they have brought in depends on the success of businesses.
“They don’t seem to realise that this winter we could lose a lot of hospitality SME’s. Quite simply because of utility and rates bills. But all of the businesses under threat contribute to tax take through VAT.”
Obviously energy is a hot topic but both Leon and Chris believe that the powers that be didn’t realise how energy prices were impacting hospitality and other businesses. Their key focus was directed at households despite the fact that associations like UKH had been warning them of the impact on business but politicians completely ignored the warning because they weren’t paying attention to the business front. There is now a package in place but it is being reviewed after six months and that makes it difficult to plan.
Chris says, “The level of businesses going dark this this winter – cafe’s, restaurants and hotels – is intimidating. Who ever would have thought that energy bills would exceed takings never mind the cost of labour? For many SME’s it is physically no longer viable for them to continue trading over the winter and it may be Easter until they open again.
“This is a great pity because for two or three decades now tourism and hospitality seasons in Scotland have been extending. The shoulder months extended out, even in rural locations, because operators invested in winter offers. But right now many businesses are choosing not to open on Monday and Tuesday’s and that will all have a knock on effect on other local businesses. Few Scottish businesses are profitable between November and March, and the winter season here is much more pronounced than it is in England. Something I think the UK Government overlooks. And one of our primary tasks at UKH is to get politicians to rethink.”
Leon agrees with Chris, “I believe that hospitality does get overlooked. It is taken for granted because people believe that it will always be there no matter what. We are part of the landscape in every community. Politicians see lots of people staying in hotels and paying their money and when the season is poor they say ‘there is always next year!’ There is a real sense of what ever happens, hospitality will prevail.”
But its not just energy and rates that are and will impact on hospitality – there is the Deposit Return Scheme lurking around the corner and Calorie labelling.
Says Leon, “Unfortunately in Scotland we have had a backlog of policy floating around for the best part of a decade and now it appears that the Scottish Government is implementing them all at once.”
Says Chris, “Our Chief Executive Kate Nicholls can, and does influence Westminster, and we need to do the same at Holyrood. She has been trying to get support out of the UK government – calling for VAT to be reduced to 10%, which is at no cost to the Scottish Government. and she has been pushing for other reforms too.”
Leon agrees, “Hospitality has had one blow after another. If VAT was reduced it could help business to keep investing. It could mean the difference between surviving and thriving.”
On the subject of rates Chris is just as vocal. “Could the government not reward businesses that are investing with some type of rates rebate. All of the £550K we saved in rates during the pandemic went into investment. We refurbished the spas here and in Nairn, and we refurbished the Balmoral Arms at Ballater which cost £2.2m. This year we can’t invest. I believe there should be reward for businesses that are continuously investing because it drives up quality and that should be rewarded.”
Leon agrees, “If we were on the 50% rates rebate that England has at the moment – that would help EBITDA and it might have allowed businesses to do things for the longer term.
“For instance Chris and I are both involved with the Fair Work convention – which identifies the levers to help businesses put in policies and practices that enhance fair work. And one of the biggest challenges is having cash to invest in people – having the money to increase pay, having the cash to offer greater flexibility. When businesses are in a precarious state the work force then find themselves in precarious state.”
Certainly the lack of work force is an ongoing issue for hospitality, and if people are worried about their jobs in hospitality it makes them less likely to stay in it.
Chris says, “Hospitality has always played a massive part in ensuring sustainable communities across the country, particularly in rural locations. The Scottish Government is keen to grow sustainable communities and green jobs have to have hospitality in the mix. They want innovation and invest in digital – so do we – we are talking the same language as Government. However they need to realise that hospitality is a shop window for Scotland and it has to be supported. If hospitality businesses go dark that is a big deal to people who live in rural communities. They need people to come to the area, and to work there to allow these communities to prosper.”
There are many other issues which also need addressing infrastructure, housing, transport. Chris explains, “Housing is a massive problem for me. We need accommodation for staff and with the popularity of Air BnB that is a problem. Ferries too are an issue for all hospitality businesses on islands. There are definitely infrastructure issues which should have been addressed before DRS. We need to be talking about better transportation and housing if we want young people with families to come to rural locations. But we have a government which is focussing on pet projects rather than dealing with the big issues which make the biggest difference.
“For instance we desperately need temporary visas for hospitality. Despite the fact that we have introduced massive benefits for our employees we still cannot find enough people to do what we want. That is also restricting turnover and that will get worse in the winter – it will be an ever decreasing circle if we don’t reverse the trend.
“The tourism and hospitality industry will always require people coming in from overseas and it is not like they contribute to an ageing population. We do utilise sponsorship visas throughout the business. The minimum salary is £25,600 – in some locations but it is not the salary but the process that is the issue. We need a flow of talent. The lack of staff is also holding back businesses and holding back the economy as businesses struggle to work towards recovery.
“People talk about low paid hospitality jobs but I do feel we have crossed the Rubicon. We have increased pay and benefits. We try to look after people and we have a longer term view. An average person with Crerar Hotels is on £15 an hour and benefits from our 10% optional service charge and still we have vacancies.”
“We need changes that will make a difference over time. We need to look at what hospitality needs for the long haul and we need Government to back hospitality and recognise what it contributes to local economies.”
Says Leon, “We at UKH are still pushing at the door. Politicians say they understand hospitality. They might understand bits of it but there is a real education piece that needs to happen. Politicians need to come into our businesses, Committees currently don’t enough spend time looking at hospitality and tourism. Although there was a debate about a minister for hospitality – it has been just talk and yet there are economic briefs for areas that don’t employ so many people. We do need someone dedicated to hospitality and tourism in government. The challenge is getting government to join the dots. We need politicians to really consider the impact their decisions will make on tourism – the tourism tax is a case in question – it will now become a local government issue. Will impact research be carried out?
“We need politicians to listen to business more and we need economic advisors sitting with cabinet members challenging their decisions. It is easy for an organisation to slide into group think. We need new ideas and things do need to be shaken up a bit. The government needs to look outside for people to come up with these ideas. And we at UKH would be keen to help.”
Leon’s role is to increase the membership of the UKH by building its network , sharing information and bringing the industry together more often.
Chris too has a role to play. He says, “The thing that fascinates me as a trustee of HIT, as a fellow of the Institute of hospitality and the Scotland committee, and now as chair of UHK Scotland is that these organisations all occupy their own lane. I think we need a ‘house of hospitality’ approach which is as strong and as identifiable as the White House. We need to share our information and create a strong motorway.”
Chris concludes, “They may think it is survival of the fittest. One restaurant closes another pops up…but they should be looking at why the businesses are not financially viable. These business are run by people who have hopes, dreams and aspiriations and the current situation we all find ourselves in – unfair rates, VAT at 20%, and crippling energy bills, and a lack of employees – is not sustainable. If we are to grow this economy, hospitality should be an integral part of the economic transformation strategy and we need politicians UK-wide to understand it and to support it.”
Everything that Leon and Chris had to say is being discussed widely in hospitality businesses, and giving the economic situation that the country faces, surely it is imperative that hospitality is allowed to thrive.
It can be a significant contributor when it comes to putting the UK back on its feet and organisations such as UKH need all the suppport they can get to give the hospitality a louder share of voice.