In a year of mixed fortunes for UK hospitality most of the bad news has come from Government in the form of botched legislation and threats of new taxes. On its own account, the industry has performed well, as Angela Frewin reports
This year has seen a welcome recovery for the hotel sector, which finally recovered from wounds inflicted over the past five years by terrorism, foot-and-mouth and fears over bird flu.
But no sector in hospitality escaped the burden of ill-executed red tape. The Government set the tone in January when it postponed the introduction of new fire regulations for England and Wales from April to October. The reason: the guidance document was not ready.
This was a depressingly familiar scenario for English and Welsh licensees still reeling from the shambolic introduction of the new licensing regime the previous November. Their Scottish counterparts faced an equally chaotic run-up to the smoking ban in enclosed public places in March.
England's liberalised opening hours might not have provoked the predicted orgy of drink-fuelled disorder and did boost local boozers, but they cost the sector dearly in hard cash (Punch Taverns put its compliance bill at £3m), stress, and the nightmare rush to get applications through in time.
The British Hospitality Association was not alone in describing the implementation as a "fiasco" - Parliament's own Select Committee also slammed the dearth of clear and timely regulations and guidance.
Ambiguity followed confusion with the July publication of a clarification note to curb councils that had been closing pubs for serving alcohol when the personal licence holder was absent. It simply muddied the legal waters further by leaving it to the courts to decide exactly how long a licence holder could be away.
Meanwhile, Scottish operators felt their concerns over Scotland's new licensing regime (earmarked for 2009) remained unanswered as the consultation closed before Christmas.
Despite everything, the pub sector was predicted to hit a turnover of £16.2b in 2006, its highest in five years.
Deal-wise, the year was dominated by Punch Tavern's £2.7b reunion with the Spirit Group to regain its crown from Enterprise Inns as the UK's largest pub operator. It offloaded 290 venues to private equity firm GI Partners for £571m.
The Rosenberg/Landesberg property team made deeper inroads into the hospitality landscape with Admiral Taverns, which nearly doubled in size to almost 2,000 venues thanks to three key buys that netted it a total of 1,300 pubs for a combined £512.5m. The team also boosted Folio Hotels' portfolio to 27 after leasing it 19 ex-Corus hotels they acquired for £116m.
Hotels bounced back to achieve their highest sales since 2000. But, while the sector is forecast to rise in value by 8% over the next five years - from £9.5b to £10.3b in 2011 - there are some storm clouds bearing down.
The industry united against the tourism or "bed" tax proposed by the Lyons Inquiry to bolster local government coffers in England. The trade fears it will simply empty its now overpriced beds of domestic and overseas customers alike.
Caterer and Travelodge spearheaded the Say No To Bed Tax campaign and presented Prime Minister Tony Blair with a 90,000-strong petition in July. But there was little Christmas cheer in November when Scotland's version of the review, the Burt Report, recommended discretionary powers for councils to levy a tourism tax.
As personal debt and global warming spiralled to unprecedented heights, two high-profile collapses underscored concerns about the sector's business model amidst warnings that "ludicrous" and "unsustainable" loan-to-value rates were overheating the market.
London and Edinburgh Swallow Group fell into a black hole of debt (estimated at £40m) as over-leveraged leaseholds brought an abrupt end to its rapid expansion to 950 hotels and inns.
The human cost of business failure was tragically underlined in the liquidation of the Distinguished Hotels consortium (blamed on the finance director's non-payment of PAYE for five years), which preceded the suicide of chairman Tim Hadcock-Mackay.
Despite these caveats, hotel mergers and acquisitions activity remained strong. The mother of deals - literally - was the £3.3b reunion of Hilton International with its US sister, Hilton Hotels Corporation, after a separation of more than 40 years.
The restaurant sector started the year with a stunning victory against red tape. A red-faced HM Revenue & Customs backed off from a legal appeal by Conran Restaurants to admit that it was wrong to have pursued operators for national insurance payments on tronc money used to top up salaries to the national minimum.
This startling U-turn left the way open for restaurateurs - many driven to bankruptcy by the Revenue's erroneous campaign - to claim back up to £50m in refunds and compensation.
Concerns about the rising numbers of obese children and environmental meltdown both loomed into sharper focus. The Soil Association slated 10 family-friendly restaurant chains for loading their children's menus with additive-packed, high-calorie junk food, while experts warned that marine stocks could be fished to extinction within 50 years.
The major deal of the year saw Gondola Holdings' 500-plus Pizza Express, Ask and Zizzi restaurants return to private hands less than a year after flotation via a £559m takeover by private equity group Cinven.
Feeding pupils and patients remained a major headache for many caterers. The September launch of new nutritional standards for schools saw uptake drop by up to 25% in some areas as kids held out for their beloved Turkey Twizzlers - a rebellion already observed during Jamie Oliver's campaign for better canteen grub last year.
While smaller and medium-sized caterers, such as Vacherin, Artizian, Charlton House and BaxterStorey, continued to thrive, the dominant players presented new faces to the world.
Compass scored some brownie points in the City with the appointment of new chief executive Richard Cousins. It came after last year's annus horribilis, marked by a string of profit warnings, a UN corruption investigation, a flood of departures, and close scrutiny of its opaque pricing policies that impacted the whole sector.
A major shake-up under the new management team included the sale of its roadside and travel concession arms (for a healthy £1.8b) and its vending business, a review of its glut of brand names, and some welcome signs of profit growth.
Sodexho's UK arm pleased investors with a return to profit after five years in the red, and Aramark and Elior's overseas parents ditched the whole problem of shareholder pressure by going private.
The "rotten year" baton passed to in-flight caterer Alpha Airports, which revealed in the new year that it was the victim of a £2.5m Europe-wide fraud. Problems with a deal with Excel Airways led to the temporary withdrawal of its shares and the resignations of its chief executive and finance director.
This heralded news of an exodus of top names in September and October, which included Alpha's commercial director, six Compass executives, two Aramark directors and Initial's Jim Walker, who had built up the group's catering arm from scratch.
While the near future threatens miles more red tape for the trade, there is a glittering prize on the horizon in the form of a potential £2b bonanza from the 2012 Olympics. Less reassuringly, this might materialise only if the Government overhauls its current strategy and funding of the £100b tourism industry.
Red-faced red-tape HM Revenue & Customs reverses its drive to levy national insurance on tips used to top up salaries to the national minimum.
Scots stub it out Scotland smoking ban begins.
Sleeping partnersCaterer joins forces with Travelodge to Say No To Bed Tax.
Holiday romance US investment group Blackstone buys the UK Center Parcs holiday village business for £1.1b.
Beefeater buyMitchells & Butlers spends £497m on Whitbread's portfolio of 239 Beefeater and Brewers Fayre pub-restaurants.
Phoney war AHG completes its £1.1b acquisition of the De Vere Group following a phoney bidding war with Travelodge owner Permira.
Turkey Twizzler holocaust New nutritional standards are introduced for school meals.
Private pizzaCinven takes the Pizza Express, Ask and Zizzi pizza chains private in a £559m deal.
Black beauty Sodexho UK & Ireland returns to the black for the first time in five years.
Nero MBO Caffè Nero founder and chief executive Gerry Ford agrees a management buyout of the AIM-listed 282-strong chain.
Airport alert Airline caterer Alpha Airports says it is investigating a Europe-wide fraud that could have cost it up to £2.5m.
Negative growth Tony Blair is castigated for overseeing a fourfold rise in Britain's tourism deficit.
Courting cousins New Compass chief executive Richard Cousins arrives as two lawsuits are filed in the USA relating to the UN corruption scandal.
Shares groundedAlpha Airports pulls its shares from the London Stock Exchange over legal uncertainties surrounding a contract.
Distinguished disaster Luxury hotel marketing consortium Distinguished Hotels ceases trading after racking up more than £1m in debt.
Veteran death Renowned chef-restaurateur Robert Carrier dies at the age of 82.
Distinguished death Former Distinguished Hotels chairman Timothy Hadcock-Mackay is found dead at his Nottinghamshire home.
Swallowed Edinburgh & Swallow Group falls into administration with £40m-plus of debt.
Coffee coup Coffee Republic co-founder and executive chairman Bobby Hashemi is ousted in a shareholder revolt.
Fished out Experts warn that sea fish stocks could be wiped out in less than 50 years.
Banned but no aid The Government announces a 1 July start date for England's smoking ban - but guidelines arrive only at Christmas.