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Celebrations in the BHA’s Centenary Year

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In this, the BHA’s centenary year, we’ve held events in every region of the country – indeed, only earlier this week I was at dinners in Scotland and York celebrating this remarkable occasion.

We’re not alone, The Restaurant Association has also been in a celebratory mood, as we mark its fortieth anniversary this year.

All these events have shown that the association is in good heart. Not every organisation reaches its hundred years – and certainly not in the great shape that the BHA is in.

When the association was formed right at the beginning of the last century, it was because hoteliers wanted to protect the hotel industry against new legislation proposed by the then Liberal government. In fact, of the 36 hotels who formed the National Hotel-Keepers Association in 1907, five are still in membership.

A remarkable record.

Since then, the association has grown - doing just what our founders attempted to do: to represent the interest of our members to government, government agencies, the media and to the world at large. In doing so, it’s grown hugely and now represents not only hotels, both large and small, but restaurants, catering outlets, food and service management, clubs and motorway service areas.

In fact, during this year alone, we’ve recruited 20,000 new rooms and 1,800 restaurants. Since the Restaurant Association joined forces with us in 2003, we now have in membership a great many independent restaurants as well as almost every major public hotel and catering company, together with independent hoteliers and caterers. Some of them are large. Most of them are small. In total, that’s over 42,000 establishments employing close on half a million people We are all united in believing that the hospitality industry has become – and will remain – a core part of the British economy.

What have we achieved in the last 100 years? The answer is a great deal. There have been many small successes – too numerous to mention here – in persuading government that one course of action, or another, would be detrimental to the industry and to the economy as a whole.

Three recent achievements would have to include the abandonment of the dreaded bed tax, which was one of the misguided proposals of Sir Michael Lyon’s report into local authority funding. We also supported the introduction of the new licensing act and successfully persuaded the Treasury to look again at its proposals for taxing tips and service charges, which certainly saved many restaurants thousands of pounds and a number millions of pounds.

But, of course, we don’t win every time. The decision in the Spring Budget to scrap the Hotel Buildings Allowance and to increase small company tax was compounded by the later decision to increase capital gains tax by 80 per cent and to abandon taper relief. All these decisions bear more heavily on the hospitality industry than on many others simply because there are many more owner operators in hospitality and hotels are typically held in ownership over a period of many years. Little wonder that the proposed measures led to an outcry.

And, of course, the most recent blow - cutting back the annual grant to VisitBritain by 20 per cent - is a most curious move for a government that claims to support the tourism industry. When so many British people are holidaying abroad, and when we rely so much on increasing the number of overseas visitors to this country, cuts to VisitBritain’s budget will have a very negative impact on tourism’s future prosperity.

Government does not appear to appreciate this. Or, if it does, it doesn’t seem to care.

There are more challenges ahead. We are currently discussing with the Treasury its decision to increase capital gains tax, bearing in mind that the proposed £100,000 concession will have little beneficial impact on the hotel industry. We will continue to campaign for greater relief here.

We have argued long and hard about the loss of the Hotel Buildings Allowance and other fiscal measures, but the Treasury – to our intense frustration - remains adamant.

There is much to be done in other areas. We are currently discussing, at length, with the Home Office the new immigration regulations, which will certainly cause our ethnic restaurants much trouble if we cannot get their chefs registered as skilled workers – which they so obviously are.

On food labelling, we have a potential problem if caterers and restaurateurs are required to state the origin of all their meat.

And the growing impatience of local authorities to publish ratings for food hygiene inspections – the so called ‘scores on the doors’ - is a cause for much concern. Food hygiene is either good or bad – there cannot be a grade, the lowest of which still allows the establishment to continue operating and where a re-inspection might take up to 18 months. We totally support good hygiene practice but ‘scores on the doors’ are misleading – and unfair to the operator and consumer. We are working with the Food Standards Authority to create a nationwide scheme, though whether local authorities will take notice of this is still in question.

We have, also, concerns about sustainability – not just environmental, but economic and social sustainability. More government pressure will clearly be brought to bear on businesses to reduce their carbon footprint, and to reduce energy and waste costs.

Yet, despite these and other concerns that have appeared in the last century, the association has presided over an industry that has grown hugely in economic importance over the last century and particularly in recent years. It’s now worth over £100bn a year, employs nearly two million people, and touches the prosperity of every part of the United Kingdom. From the tip of Cornwall to the north of Scotland, tourism and hospitality plays a key role in the economic and social life of the country. It’s certainly no candy floss industry, as Harold Wilson once described it. And then, eating his words, he introduced a massive grant and loan scheme to boost the number of hotels.

Today, we’ve expanded without any government aid – over 140 new hotels last year and similar numbers in each of the four preceding years. Similar numbers, too, are planned for the future. Budget hotels are leading the way but hotels of all sizes and types are being built in major towns and cities. We estimate that the industry is currently investing over £3bn a year in new facilities, extensions and refurbishments.

Our restaurant industry has not escaped this investment, either. New restaurants have opened; new restaurant chains have evolved. Now London is widely regarded as the eating out capital of the world, led by British-born chefs – though we need so many more of them. In the provinces, the standard of food is equally high – again led, mainly, by British chefs. Michelin stars are now commonplace; 40 years ago, when the Restaurant Association was formed, they were practically non existent.

Only our resorts are missing out in this investment, which is one factor why there is a continuing increase in the number of British people going abroad for their holidays – encouraged, of course, by the growth of budget airlines. The imbalance of tourism payments – currently £19.4bn – is estimated to become £24bn by 2012.

So, looking to the future, perhaps our biggest challenge is to encourage more British people to holiday at home. I suspect that this is more critical to the future success of the hospitality industry than the need to attract more overseas visitors, which is also critical.

Then, there is the need to recruit more staff – preferably British - and to pay greater attention to staff training and development and, dare I mention it, working conditions. And looming large on the horizon is the certain need to reduce our energy costs. According to one survey, hotel energy costs have risen from 2.9 per cent of revenue in 2004 to 4.2 per cent in 2006 – a rise of 45 per cent in two years.

These are all challenges that we have to face in the future, but we’ve met similar ones before. The development of the short breaks market in the 1960s, for example, was surely marketing at its most effective and most inspired, leading to a market that’s currently worth £7bn. So we have to continue to innovate: to seek new markets, some of them niche, some more broadly-based.

All this in a world where energy costs will keep rising and, in the long-term, where sources of energy will get scarcer. In a world where issues of sustainability will certainly impose costs and taxes of their own, not yet foreseen.

In doing so, we must be mindful of all the efforts our predecessors have put in on our behalf. We have much to be thankful for in this centenary year. We have achieved much. But let’s not forget that we have much more to achieve in the future.

The association remains committed to what has always been its guiding principle: leading, supporting, guiding and helping this great industry of ours in all its endeavours. And trying to get government on-side.

Let’s all wish the next 100 years to be as successful as the last century.

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In this, the BHA’s centenary year, we’ve held events in every region of the country – indeed, only earlier this week I was at dinners in Scotland and York celebrating this remarkable occasion.
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