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Written evidence submitted by UKHospitality Cymru
UKHospitality, and its Wales arm HospitalityCymru, provides a unified voice for hospitality. Members include coffee shops, contract caterers, hotels, nightclubs, pubs, restaurants, stadia, visitor attractions and many more related businesses.
Engaging with government, the media and the public, UKHospitality and HospitalityCymru work to develop a robust case on how to unlock the industry’s full potential as the biggest engine for growth in the economy and ensure that the industry’s needs are effectively represented.
Hospitality is the 3rd largest private sector employer in the UK; double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined; it creates
£130bn in economic activity and generates £38bn of tax for the Exchequer, funding vital
services; Hospitality represents 10% of UK employment, 6% of businesses and 5% of GDP and provides 140,000 jobs in Wales and an additional 40,000 supplier jobs.
UK Hospitality Cymru also leads on the “farm-to-fork” Food 7 Cymru network of seven leading trade associations that represents the food and drink industry from production to consumer purchase point.
UKHospitality Cymru welcomes the opportunity to contribute to this inquiry into promoting Wales for inward investment. As a vital component of the Welsh economy, hospitality plays a key role in supporting businesses, workers, and visitors, making Wales a more attractive
destination for investment. Our sector not only provides significant employment but also serves as a crucial part of the infrastructure that supports inward investment through leisure, tourism, and business services.
Wales has a strong international reputation in both creative industries and sports, offering significant potential for attracting inward investment. The film, television, and gaming sectors have demonstrated success in drawing investment, thanks to their skilled workforce and high production values. The thriving sports sector, including world-class events and facilities, enhances Wales’s global visibility.
To build on these strengths, we recommend:
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While Wales has a rich cultural identity and a strong offering in tourism, hospitality, and business, promotional resources are finite. With additional assistance, more work could be done in areas where wider emphasis can be placed on articulating Wales’s strengths in sustainability, workforce skills, and business-friendly policies.
We suggest:
Several challenges hinder Wales’s ability to attract and retain inward investment, including:
reliefs, the hospitality sector is now being asked to pay three times the amount we should pay according to business trading conditions. This is simply economically unsustainable and an imposition which severely restricts our ability to contribute towards growth.
To address these barriers, we propose:
Reform will not only enable our indigenous businesses to invest, improve and recruit but it will also provide a better climate for any incoming businesses.
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Welsh businesses require greater support to position themselves as attractive partners for inward investors. This includes tailored business development programmes, financial incentives, and improved collaboration between the private sector and government.
Our key recommendations include:
Given the hospitality sector’s ability to provide the community assets to help attract and keep inward investors, Government could take supportive business rates activity, which we alluded to above, further and look at hospitality-serviced Enterprise Zones, Special Business Rate
terms/holidays or creating Hospitality “Hubbles”, a set of supportive infrastructure in a “bubble” or “bubbles” around a core central hospitality business such as a large hotel, sports venue and/or entertainment complex.
Apart from utilising existing businesses and enabling their upgrading/extension with targeted support, such centres of incentivisation could also attract new hotels as a centrepiece where bed stock was limited and encourage new and additional food and drink offers and other themed additional facilities. Businesses in the “hubble” could also be incentivised to bring in new investment by using their network of contacts and visitor links.
For inward investment to have a lasting impact, it must contribute to sustainable economic development. This means prioritising local supply chains, supporting small and medium enterprises (SMEs), and investing in long-term workforce development. They are key to ensuring that inward investment benefits Welsh communities in the long term.
We, and our colleagues in the Food 7 Cymru network, believe Wales needs an advanced, indigenous Comprehensive ‘Farm to Fork Strategy’, based on collaboration with commercial and public sector partners to meet ambitious sustainability targets for the indigenous food, farming and hospitality sectors in Wales to promote growth and investment.
This should include:
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Investment in Innovation and Logistics: Foster public-private partnerships to drive innovation in food and drink manufacturing, improve logistics, and develop a Welsh Freight and Logistics Plan with a dedicated minister to oversee implementation.
Promotion of Climate-Friendly Food Production: Develop policies to improve the efficiency of Welsh food and farming, enhance land use for carbon capture, and boost on-farm renewable energy and the bioeconomy.
Supporting Net Zero and Renewable Energy: Incentivise farmers to invest in on-farm renewable energy that benefits local communities, ensuring Wales meets Net Zero targets while growing the food and farming sector.
Prioritising Food Production and Environmental Balance: Recognise food production as a national asset, halt the use of productive agricultural land for environmental targets, and balance food production with environmental objectives to enhance food security.
Advancing the Circular Economy and Waste Reduction: Promote reductions in food waste, create a fully functioning circular economy, establish a producer-led Extended Producer Responsibility (EPR), and align the Deposit Return Scheme (DRS) across the UK.
Investing in Infrastructure for Sustainable Logistics: Support the development of a UK-wide logistics roadmap to net zero, invest in public charging for commercial
vehicles, rail electrification, and maritime infrastructure, and provide guidance for green and efficient urban logistics.
Enhancing Workforce Access and Development: Ensure the food and farming sector in Wales has access to the workforce needed for growth, providing accessible and
affordable skills training and development.
Promoting Careers in Food, Hospitality and Farming: Promote career opportunities in the agri-food sector through schools and colleges, and collaborate with local food and drink manufacturers to encourage young people to consider careers in the industry.
Supporting Training and Business Development: Continue offering advice, guidance, training, and business support to agri-food businesses to foster an innovative and progressive industry, and give businesses more control over training budgets through apprenticeship levy reform.
Maintaining a Flexible Labour Market: Ensure a flexible labour market that benefits both employees and employers, supports good pay and conditions, reduces economic inactivity, and develops a highly skilled, diverse and motivated workforce.
Profiling and Funding for Industry Careers: Positively profile careers in the industries, provide appropriate funding for key training courses, offer flexibility in apprenticeship
levy funds, and ensure transparency on skills funding to bridge the skills divide across Wales.
Support for food festivals: Build upon the growing trend of food festivals to showcase the best of Welsh food, drink and hospitality, drawing in overseas funding and visitors.
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Wales has already made progress in promoting its food and hospitality sectors internationally. Initiatives such as BlasCymru/TasteWales have successfully showcased Welsh food and drink to global buyers, while Food and Drink Wales has positioned Wales as a high-quality, sustainable producer. These efforts have certainly helped to build Wales’s reputation in these
fields but further scaling up would bring its own rewards in attracting greater inward investment.
Internationally, successful models include:
To build on its strengths, Wales should:
affairs to diet, food, health and nutrition and a government/industry wide strategy would benefit by adding value to existing resources.
By enhancing and amplifying these efforts, Wales can position itself as a premier destination for food and hospitality investment.
UKHospitality Cymru is committed to supporting efforts to attract inward investment to Wales. By leveraging the hospitality sector’s role in economic growth, improving business conditions, and implementing targeted marketing and support strategies, Wales can enhance its appeal to investors while ensuring sustainable local benefits. We will continue to work collaboratively with policymakers and industry partners to achieve these goals.
14 February 2025