Look out, there's a big boat coming down the river
There has been a robust response in Caterer to the recent comments made by Minister for Tourism, Kim Howells. His suggestion that hospitality is a rip-off industry has upset many people but, equally, there are those who agree with some of what he says.
The reaction has been as fragmented as the industry itself. There are those who feel that he has hampered the drive to attract new recruits to the industry, and there are those who feel that his comments will affect the image of the industry in the City.
If there is one common affront, however, it is the apparent lack of Government support for operators on the front line in the wake of the foot-and-mouth crisis. "You gotta stand on your own two feet" is the underlying message from Howells.
Fair enough; this industry is pretty good at doing that. A report by consultant PKF, while looking like bleak news, also suggests that the fall in London room occupancies is not as bad as was first feared. Not only that, but occupancy in many regions outside London has actually stood up favourably compared with last year.
Having registered the good news, though, it would be wrong for operators to ignore some worrying signs that the economy, at a macro level, is beginning to wobble. It's not surprising that executives of large companies are sensitive to the throwaway comments of a junior government minister at a time when hospitality share prices are being knocked back in the City.
While individual share prices might reflect the effects of foot-and-mouth, the general mood of the City has much more to do with business confidence. And it is a growing lack of confidence in the world economy that is causing the latest wobble.
The consequences of foot-and-mouth have hit some operators very hard, it's true, but what is making more of an impression on the UK economy is the so-called softening of US and European trading.
According to the leaders of the G8 advanced nations, the outlook for the world economy is "not exactly rosy". There is obviously a slowdown in the USA, and France and Germany are apparently "lagging behind". The situation in Japan and the Far East is still very volatile. As a result, many Americans are putting off their "big trips" until things are more settled at home. They are waiting, too, to see if the value of sterling falls.
If the Government wants to improve conditions for the service industries of the UK, particularly hospitality, it should urge the Bank of England to take action that will bring the price of sterling into line with the dollar and the euro.
Complaining about service levels in a few London hotels and moaning about the pictures on hotel walls may be perfectly valid, but it will not have the slightest effect on the number of visitors coming to the UK.
The Government and the Treasury and the Bank of England managed to stave off a recession in the UK two years ago by adjusting interest rates. They should do the same now by reducing the price of sterling. That would be more valuable to hospitality in the long term than cash handouts in the short term.
Forbes Mutch, Editor, Caterer & Hotelkeeper
