What's the biggest item of expenditure for any hospitality business?

Wages, of course. For a hotel, it represents about 30 per cent of total revenue (maybe more, and up from 24 per cent in 1997); for a restaurant, it's about 40 per cent - and rising there, as well; for a contract caterer, it's nearer 45 per cent.

So the natural inclination of any business worried about wage costs in difficult economic times is either to cut back on the number of staff employed, or to cut back on wages.

Wrong! Both of these steps can have very negative repercussions. The correct answer - particularly when food, energy and other costs are rising so rapidly, as they currently are - is to ensure that the staff who are employed are as highly trained as they can be. Only by raising skill levels will hospitality businesses be able to reduce their demand for more and more staff. How? Because more skilled staff means fewer staff.

There's no hiding the fact that the hospitality industry has a poor training record. For many years, we've not trained enough young people. We produce too few skilled craftsmen from our colleges. So many employers recruit unskilled people and don't train them properly; alternatively, they poach skilled people who have been expensively trained by other employers.

Of course, this has been the dilemma facing hospitality businesses for many years. It's nothing new. So how do you encourage staff to give more - to work smarter rather than harder? How do you satisfy customers, who are evermore sophisticated and evermore demanding? And where do you find skilled staff at a time when recruiting them becomes evermore difficult, and retaining them demands high levels of management skill?

Surely, the answer is to recognise that a business needs fewer staff if they are fully trained than if they are not fully trained; that skilled staff are more economical to employ than poorly trained staff because they are more efficient and you need fewer of them; and if fully trained staff earn higher wages for a good return, that is better than paying poorly trained staff a high wage for a poor return.

The emergence of the National Skills Academy gives the industry the chance to tackle its training crisis in the most sensible way. Through it, we can concentrate on training our young people in selected high level colleges throughout the country. We can then ensure that when they leave, they have the skills needed by the industry - and can build on them.

With the high cost of wages, and the difficulties of recruitment that businesses face, this is the only way forward. With skilled staff, we can fully utilise their talents and maximise their contribution to the business. We can also maximise their earnings. And by employing fewer of them, we can reduce the pressure on recruitment. It's win-win all round.

Bob Cotton is chairman of the National Skills Academy for Hospitality