On 10 March, my article on the value of corporate hospitality and events appeared on the centre pages of the Times newspaper. Published in conjunction with Raconteur Media, I am now able to post it here, in its original form, with kind permissions.
If you would like to access the entire supplement with two further articles by me, please
click here.
The UK’s events and hospitality industry is a major contributor to the domestic economy. Its tentacles extend into areas of retail, tourism, sport and leisure and its extensive supply chain consists of catering, farming, floristry, logistics, production, venue management, entertainment, staffing, accommodation and many other small-to-medium sized British businesses.
According to a lobbying body called the Business Visits and Events Partnership (BVEP), the core of the sector is worth £36.1billion to the country’s wealth.
The BVEP is chaired by Michael Hirst, OBE. He says: “It’s a vibrant part of the visitor economy but also has an active role in the creative industries, trade development and in encouraging cultural appreciation.”
The conference and business events market on its own contributes £18.8billion. This includes spend at venues and in the wider destination by delegates and organisers before, during and after an event.
Industry association Eventia arrived at this figure after conducting its 2010 UK Events Market Trends Survey. The annual survey is based on data supplied by 403 venues from across the UK. Further key findings show that 94 million people attended an estimated 1.32 million events in 2009 and that hotels currently hold the majority (61 per cent) of all business events in Britain.
The BVEP calculates that, exhibitions, conferences, meetings, corporate hospitality and incentive travel, together form an economic contribution of £30.3billion. The remaining £5.8billion is made up from sports events (£2.3billion), music events (£1.4billion), festivals and cultural events (£1.1billion), plus other outdoor events (£1billion).
All these event types contribute significantly to tourism, creative enterprise, trade and export development, as well as to the exchange of information and knowledge and to community cohesion. By bolting on the hospitality sector’s far reaching services such as restaurants, contract catering, hotels and other accommodation providers, consultancy Oxford Economics estimates that the overall economic impact could be closer to £46billion.
Mike Kershaw, chairman of event services firm the Concerto Group says: “Events are one of the most efficient means of keeping money within the UK economy. Retail spend has maybe a three or four-time multiplier before it leaves the country. But spending money on an event will see transactions multiply along a more extensive and predominantly British supply chain. With 20 per cent VAT on every transaction heading back into government coffers, plus the amount of people being kept in employment, the hospitality and events industry should be championed, when instead it is often thought of as frivolous.”
In an independent study carried out last year on behalf of the British Hospitality Association (BHA) - a trade body, which includes event management within its representation - Oxford Economics determined that the wider hospitality and events industry directly contributes 2.44 million jobs and another 675,000 jobs through multiplier effects along the supply chain. Two-thirds of these multiplier jobs involve the manufacture of food, beverages and tobacco, agriculture and business services.
The BVEP says that there are some 550,000 people employed by more than 25,000 businesses with a core remit to stage or supply events. These businesses include event management agencies, venues, suppliers and destination management companies.
“The sector is resilient and events provide real recreational and motivational opportunities for communities,” says Hirst. “During the recession for example, whilst corporate meetings inevitably fell back in line with lower levels of business activity, attendance at UK festivals, sporting, cultural and music events grew by up to 20 per cent.”
The BHA states that, with the wider total of 2.44 million jobs representing around 8 per cent of total employment, this makes the hospitality economy the UK’s fifth biggest industry in employment terms. It places it ahead of other broad sectors such as financial services, transport and construction, and gives it a similar scale to education.
Like the BVEP, the BHA is also focused on forming closer links with government, in order to achieve a shared goal of sustainable economic growth.
“Given the right framework, there is real opportunity for hospitality economy jobs in Britain to rise to 2.76 million by 2015 and 3.09 million jobs by 2020,” says BHA chief executive Ufi Ibrahim. “Hospitality and events create jobs at local level and impact upon regional regeneration schemes. At a time when the Government’s spending review has lead to redundancies and job losses, here is an industry that really can make a difference.”
At the end of last year, the BHA put forward a partnership proposal to government, which asks for, amongst other things, a permanent cross-cabinet committee for hospitality and tourism.
Ibrahim says: “Our fragmented industry is affected by policy decisions taken across many government departments. By engaging senior cabinet ministers, this will help to ensure that the decisions of individual departments do not hinder David Cameron’s pledge to make Britain one of the top five tourist destinations in the world as well as the industry’s potential contribution to job creation across the UK.”
In June 2010, the opening of the UK capital’s International Convention Centre, the ICC London ExCeL immediately created 1,000 new jobs in this regeneration area of east London.
The venue’s director of conferences and events James Rees anticipates that a further 3,200 local jobs will be created as a knock-on effect of the ICC by the end of this year.
“The build represented a private investment of £165million but the projected economic benefit stands at £1.6billion by the end of 2011,” he says.
Both the ICC London ExCeL and the Queen Elizabeth II Conference Centre in the heart of Westminster work closely with convention bureau Visit London to pitch for large international congresses, which bring delegates to the UK capital from all over the world.
Ernest Vincent, chief executive of the QEII Conference Centre estimates his venue contributes around £200million a year to the visitor economy.
“The role events play in the development of the tourism industry needs much more recognition and encouragement. It can readily be one of the engines to rebalance our national economy,” he says.
But it’s not just purpose -built venues that rely on the full impact of event spend. Visitor attractions, heritage venues, museums, art galleries, stadia and a host of other dual-use facilities all depend heavily on the business of events.
The Concerto Group’s Kershaw says: “Where would London’s museums be without the revenue generated from holding corporate and private events? At the Government’s door with cap-in-hand, that’s where. The business model for hotels doesn’t stack up with beds alone. They all need conference and banqueting business to survive. And I don’t believe there is a single restaurant in London that could exist without hosting corporate dining and events.”
Kershaw’s claims are backed up by Lisa Hatswell, the corporate sales manager of the EDF Energy London Eye and chair of marketing consortium, Unique Venues of London (UVL).
She says: “Our 73 members collectively generated £68million from events held in 2010. With a mixture of charities, free public attractions and heritage sites, many rely on a secondary events revenue stream to maintain their architecturally renowned buildings, grounds or exhibits.”
Kensington Palace, Hampton Court Palace, the Victoria & Albert Museum and ZSL London Zoo are all UVL members.
Charlotte Winship is events manager at Kensington Palace, which is managed by independent charity Historic Royal Palaces. She says: “In hiring venues like ours, clients are providing valuable support to the conservation of our country’s heritage. We receive no government or Crown funding and therefore rely on income derived from visitors, donors and venue hire. All revenue received from venue hire directly contributes to the conservation of Kensington Palace.”
Next year, events and hospitality will play a major role in the 2012 Olympic and Paralympic Games. It’s reassuring to know that not only does Britain already have a gold medal-standard industry, but that its impact is driving the country’s economic recovery as well.
