HOSPITALITY & TOURISM IN
GREATER MANCHESTER
NOVEMBER 2013
1
1
INTRODUCTION
The hospitality and tourism sector contributed £40.6bn to the UK economy in 2011 and
employed over 180,000 people.
In Greater Manchester (GM), the hospitality and tourism sector employs 7% of the
working population, representing over 83,000 individuals. In terms of gross value added
(GVA), the sector contributed £2.1bn to the GM economy in 2011, representing 6% of the
conurbations’ economic output.
As well as local and national tourists, there are over one million international leisure
visitors to GM every year, with Manchester being the third most popular city for
international visitors, after London and Edinburgh.
For the purpose of this report, hospitality & tourism have been defined as follows:





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Accommodation (SIC code 55)
Food & beverage service activities (SIC code 56)
Travel agency, tour operator and other reservation service and related activities
(SIC code 79)
Libraries, archives, museums and other cultural activities (SIC code 91)
Gambling and betting activities (SIC code 92)
DEMAND FOR SKILLS IN HOSPITALITY & TOURISM
Business Base
The Inter-Departmental Business Register (2012) suggests there are approximately
5,600 hospitality & tourism businesses within the conurbation, representing 8% of the
total business base in GM. A clear majority of these (76%) operate in the food &
beverage service sub-sector.
Key hospitality & tourism employers in GM include Mc Donald’s; The Whitbread Group
Plc, who own brands such as premier Inn, Beefeater, Table Table, Brewers Fayre,
Taybarns and Costa Coffee; Grosvenor Casinos Ltd; Britannia Hotels Ltd; and Village
Hotels & Leisure among many others.
Table 1 – Number of GM businesses in hospitality & tourism, 2012
SUB-SECTOR
No OF BUSINESSES
Food and beverage service activities
Gambling and betting activities
Travel agency, tour operator and other reservation service and related activities
Accommodation
Libraries, archives, museums and other cultural activities
TOTAL
4,296
554
339
279
160
5,628
Source: IDBR, 2012
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Location of businesses
Table 2- Location of hospitality & tourism businesses in GM
N
%
% of local
economy
6.7%
8.0%
10.2%
8.1%
7.7%
9.0%
6.5%
7.7%
6.2%
7.9%
8.0%
Bolton
467
8.2%
Bury
377
6.7%
Manchester
1,428
25.4%
Oldham
411
7.3%
Rochdale
379
6.7%
Salford
550
9.8%
Stockport
577
10.2%
Tameside
367
6.6%
Trafford
516
9.2%
Wigan
555
9.9%
GM
5,627
100%
Source: IDBR, 2012
NB NW and UK level IDBR data not available for this sector
One quarter of GM’s hospitality and tourism businesses are located in Manchester,
reflecting the significant draw of the City for leisure and tourism visitors. Stockport has
the next highest share of sector businesses whilst Tameside has the smallest share.
The Hospitality and tourism sector accounts for a tenth of all businesses in Manchester.
The authority with the lowest percentage of hospitality and tourism businesses as a
proportion of its total business base is Trafford, where only 6.2% of the total business
base operates in the hospitality and tourism sector.
Business size profile
40% of businesses in the hospitality and tourism sector are small enterprises (10-50
employees), compared to only 22% across GM as a whole. Over a quarter (27%) are
medium sized enterprises (50-250 employees), compared to only 5% across GM as a
whole.
Employment
The hospitality & tourism sector employed 83,000 people in GM in 2011, representing
7% of total employment in GM.
Restaurants, hotels, and pubs, bars and nightclubs comprise the greatest number of
businesses and represent the greater share of the sector’s employment, with over a third
of employment within the sector concentrated in restaurants and mobile food service
activities, followed by beverage servicing activities (20%), and hotels and
accommodation (14%).
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Table 3 – Employment in Hospitality & Tourism sub-sectors in GM, 2011
SUB-SECTORS
Restaurants and mobile food service activities
Beverage serving activities
Hotels and similar accommodation
Event catering activities
Gambling and betting activities
Travel agency activities
Library and archive activities
Tour operator activities
Other accommodation
Other food service activities
Other reservation service and related activities
Museum activities
Holiday and other short stay accommodation
Operation of historical sites and buildings and similar visitor
attractions
Botanical and zoological gardens and nature reserve activities
Camping grounds, recreational vehicle parks and trailer parks
TOTAL
EMPLOYEES IN
GM
29,700
16,320
12,010
11,360
5,130
3,270
1,540
1,130
750
680
580
580
170
80
70
20
83,400
% OF
SECTOR
36%
19%
14%
14%
6%
4%
2%
1%
1%
1%
1%
1%
100%
Source: Business Register & Employment Survey, 2012
Geographic Distribution
GM Hospitality and Tourism employment is concentrated in Manchester local authority,
with over a third of employees within the sector working in Manchester. Wigan and
Bolton have the next largest numbers of hospitality and tourism sector employees.
Figure 1 – Hospitality & Tourism employees across GM districts, 2011
BURY
TRAFFORD3,600
3,700 4%
ROCHDALE
4%
4,200
5%
OLDHAM
4,600
6%
TAMESIDE
6,400
8%
STOCKPORT
6,700
8%
SALFORD
7,100
9%
MANCHESTER
29,900
36%
TOTAL GM
HOSPITALITY &
TOURISM
EMPLOYEES:
83,400
BOLTON
7,800
9%
WIGAN
9,400
11%
Source: Business Register & Employment Survey, 2012
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Sector growth forecasts
Growth forecasts for the hospitality & tourism industries in GM are drawn from the
Greater Manchester Forecasting Model (GMFM) produced by Oxford Economics on
behalf of GM.
In GVA terms, the sector’s contribution to the Greater Manchester economy is forecast to
grow by 34% (£741m) between 2012 and 2022. GVA in GM as a whole is expected to
rise by £14.6bn over the same period.
Employment is estimated to grow more modestly than GVA, though still at a healthy
13%, representing the creation of approximately 12,000 jobs from 2012 to 2022. This
represents 13% of the total jobs that will be created in GM in the next ten years.
While GMFM forecasts a general trend towards increased demand for higher level skills
over the next decade across the GM economy as a whole, specific forecasts for the
hospitality & tourism industry suggests that this particular sector is one that will continue
to offer significant numbers of mid- and lower skills jobs.
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SUPPLY & PROVISION OF SKILLS
This section reviews data on the number of apprentices, further education and higher
education students who live in GM and who are studying Hospitality and tourism sector
related courses. It aims to give an indication of the potential supply of skilled labour to the
sector. However, when reviewing the following data the following caveats should be
noted:
1. A person’s subject of study is not necessarily an indicator of their future
employment occupation;
2. Many GM learners are studying for academic qualifications (e.g. history,
geography) which could make them suitable for employment in a range of sectors
– these learners are not included in the analysis;
3. Across the relevant datasets up to 10% of learners have their study subject listed
as unknown – these learners are not included in the analysis;
4. The latest available data on 16-19 year old and Higher Education students is less
current (2011/12 vs. 2012/13) than the latest available data on 19+ and
apprenticeship students; and
5. There is no official line on which subjects of study are directly relevant to which
sectors of the economy, therefore New Economy has had to make a judgement
on which subjects and apprenticeship frameworks map to which sectors – detail
on this mapping exercise is provided in an appendix to this report.
Thus the figures presented are indicative of the pool of labour from which the sector
could recruit.
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16-19: Further education (FE) and school sixth forms
During the 2011/2012 academic year, there were just over 11,000 starts in hospitality
and tourism related subjects across FE and sixth form colleges in GM.
The most popular subject area is ‘sport, leisure and recreation’, with two thirds of the
starts in this area. 15% of starts were in hospitality and catering, and 11% in travel and
tourism. Of all directly or indirectly related course starts, half were at Level 3.
Two providers, Hopwood Hall College and Bury College together account for 20% of
these EFA-funded starts. Other colleges and sixth forms who are active in this area
include Trafford College, Bolton and Salford City College.
Since the 2009/10 academic year the number of starts in hospitality and tourism related
subjects across FE and sixth form colleges in GM has increased by 18%. Over the same
period numbers of starts in all subjects have increased by 12%, demonstrating that FE
and sixth form college courses relevant to the hospitality and tourism sector are become
more popular with students. Hopwood Hall, Bolton and Trafford Colleges have all
significantly increased their provision of hospitality and tourism courses over the last
three years.
90% of FE funded hospitality and tourism starts are full-time, full-year course places.
Part-time including e-learning, at 7% of all provision, is the next most popular mode of
study. Students studying FE hospitality and tourism related subjects are slightly more
likely to be studying full-time than GM FE students as a whole.
GM residents from ethnic minority backgrounds are less likely to be studying FE
hospitality and tourism related subjects than would be expected given the size of the
non-white student body as a whole.
Adult Skills Funding Agency (SFA)-funded provision (excluding apprenticeships)
In 2012/13 the SFA funded just over 20,700 starts in hospitality and tourism training
starts by GM residents aged 19 and over. These starts were split across 4 sector subject
areas:

Hospitality & Catering – 6,800 starts

Leisure, Travel & Tourism – 200 starts

Sport, Leisure & Recreation – 12,600 starts

Travel & Tourism – 1,200 starts
SFA funded provision to the sector has declined by 7% over the past five years, in line
with the overall SFA provision decrease of 8%. By sector subject area, starts within travel
and tourism and sport, leisure and recreation have been declining, whilst starts in
hospitality and tourism have been increasing slightly.
Looking in more detail at the types of residents on these courses shows that:

SFA funded learners are evenly split between males and females;
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
Just over half are studying at Level 3 and above – this is higher than the allsectors figure of 41%; and
Table 4 - Level of study by GM residents of SFA funded Hospitality & Tourism courses,
2012/13
Level
Level 1 & Entry
Level 2
Level 3
Level 4+
Hospitality &
Tourism
20%
20%
21%
0%
All sectors
10%
20%
20%
21%
Source: SFA, 2012/13
The largest providers of Hospitality & Tourism sector training in GM by number of SFA
funded starts include:





Oldham Council
Hopwood Hall College
Salford City College
Bolton Council
The Manchester College
Apprenticeships
Every year approximately 860 GM residents start an apprenticeship framework that is
related to the hospitality and tourism sector. The vast majority (86%) of starts are on the
hospitality and catering framework, followed by the travel services framework with 6% of
starts each year.
Apprenticeship starts in hospitality and tourism have almost halved with each year since
2010/11 (with 3300 starts in 2010/11, 1600 starts in 2011/12 and 860 for 2012/13),
compared to 124% rise in overall apprenticeship starts across GM over the same period.
Some 77% of hospitality and tourism apprenticeship starts are at the intermediate (or
lowest) level, with the bulk of advanced apprenticeships taking place within hospitality &
catering and leisure management.
Apprenticeship starts in the sector are relatively gender balanced, with 47% of starts
made by females, and 53% by males – similar to the gender proportions across all
apprenticeships in GM.
With regards to apprenticeship providers, Babcock Training is the largest provider, with
113 starters in 2012/13, followed by McDonald (89), and the Alternative Hotel Group.
Apprenticeships are mainly started by younger people, with almost two thirds being
under 25 years (63% in 2012/13 - with 23% between 16 and 18 years, and 40% 19 to 24
years). The demographic make-up of the apprentices starting in this sector has
considerably changed since 2009/10 - with the proportion of under 19 year olds starting
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apprenticeships falling, while at the same time the proportions of 25 to 49 year olds
starting apprenticeships in this sector steadily increasing.
Apprenticeship
starts 2012 / 2013
(total number)
Age Groups
Under 19
194
19-24
344
25-30
142
31-49
156
50-64
21
65+
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Total Number
858
Higher Education (HE)
GM is home to four universities (the University of Manchester, Manchester Metropolitan
University, University of Salford, and the University of Bolton) who collectively have more
than 100,000 students and who produce almost 30,000 graduates each year.
The subject breakdown provided by the Higher Education Statistical Agency (HESA) is
not detailed enough to extract the number of students in hospitality & tourism-related
courses within GM’s HE institutions. However, data on the destination of leavers
suggests that following the 2010/11 academic year, 1,230 GM graduates were working in
the hospitality & tourism industry six months after graduating. About half worked in
accommodation and food service activities, and the other half worked in arts,
entertainment and recreation.
Table 5– Destination of leavers employed in hospitality & tourism, 2010/11
SECTOR
Accommodation & food service activities
Arts, entertainment & recreation
TOTAL
UNIVERSITY OF
BOLTON
UNIVERSITY OF
MANCHESTER
MMU
UNIVERSITY OF
SALFORD
TOTAL
35
35
70
170
240
410
305
190
495
135
120
255
645
585
1,230
Source: HESA (2011)
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4
SECTOR SKILLS ISSUES
Current skills issues facing the sector
The latest evidence from People 1st1, the Sector Skills Council for Hospitality, Leisure,
Travel & Tourism, suggests that continued growth and the need to replace existing staff
mean the sector continues to advertise vacancies in large numbers. In 2011, 16% of
hospitality and tourism employers had a vacancy, which is higher than the UK economy
as a whole (12%). Vacancies were most commonly reported in hotels, restaurants, and
pubs, bars and nightclubs.
According to the quarterly Hospitality Employment Index, the number of job
advertisements in 2012 fell by eight percent compared to 2011, showing that the market
may be levelling. There were significant variations in job postings by occupation, with the
highest numbers of roles available for restaurant managers and a variety of chef
occupations. This demand may reflect the growth in the restaurant sector.
A total of 6% of hospitality and tourism establishments said they have a vacancy they
considered hard-to-fill at the time of the UKCES Employer Survey in 2011, slightly higher
than the UK average of 4%. Using a slightly different measure, People 1st research
recently showed that one in ten hospitality and tourism employers (11%) had
experienced vacancies that were hard-to-fill in the previous twelve month period. By
industry, hotels (16%) and restaurants (13%) were most likely to have experienced
difficulties. By occupation the highest proportion of hard-to-fill vacancies were chefs
(39%).
The main reasons behind hard-to-fill vacancies relate to the quality of applicants, in
particular a low number of applicants with the required skills (32%), attitude, motivation or
personality (21%). Despite high levels of unemployment, 18% of employers with hard-tofill vacancies believe there are insufficient numbers of people interested in doing the
types of work available.
Around two thirds (65%) of hard-to-fill vacancies in the sector are due to skill shortages,
although only a relatively small percentage of establishments (4%) are affected. The
majority of skill shortage vacancies are for elementary staff (43%) and skilled trade
occupations (41%).
The types of skills that are difficult to recruit can be grouped into three areas: job-specific
skills, which include culinary skills for chefs; inter-personal skills or softer skills such as
communication, customer service and team working; and management and leadership
skills.
In terms of occupations, chefs remain difficult to recruit as there has been an increase in
demand for these skills as the pub industry has started to focus on food and the
restaurant industry has continued to grow.
The labour turnover rate across the hospitality and tourism sector continues to fall with
the latest data showing a turnover rate of 20%, a significant fall from 31% in 2009. Staff
1
http://www.people1st.co.uk/webfiles/Research/State%20Of%20The%20Nation/2013/Executive%20summary%20hosptiali
ty%20and%20tourism.pdf
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reluctance to change employers during the current economic climate may explain this,
however anecdotally more employers appear to be focusing on how they engage and
retain their staff, recognising that there can be significant costs to recruiting and training
new employees.
Future trends, barriers to growth and opportunities
Through the literature available at the UK level it is possible to identify a number of
potential drivers, presenting either opportunities or barriers to hospitality and tourism
business growth over the next 3-5 years. Overall, the evidence suggests that customer
trends are employers’ most important concern for the future.
Some 41% of employers taking part in the UKCES Employer Survey in 2011 believed
that changes in customer spending patterns would be an integral driver for their business
in the future, while 44% thought they represented a barrier to growth. Equally, changing
customer tastes and preferences could present both opportunities (32%) and barriers
(28%) to growth, requiring businesses to reassess their target markets for products and
services.
Rising customer expectations was seen as a positive trend among 28% of employers. To
meet these expectations, it follows that the investment required to improve quality and
standards in a service driven sector such as hospitality and tourism should focus on
increasing the skills of those working in the sector.
There was the view that technology and social media were helping customers to become
increasingly knowledgeable and well-informed. As a result customers have high
expectations about the products and services they receive and businesses need to not
only meet these, but exceed them.
With rising expectations, increased competition and knowledgeable customers looking
for both value for money and good quality, there was a strong message that the service
provided – and the people providing that service – would be the crucial differentiator.
Social media is key for many businesses as they look to take advantage of new ways to
engage with customers; almost 1 in 3 (29%) expected this to be a growth driver,
compared to just 11 percent who saw it as a barrier. However, hospitality businesses
have tended to be slow adopters of social media and online technology, mainly due to a
lack of understanding, time or money, or a fear of negative reviews.
When asked to identify which skills they thought would be important to their business in
the next 3-5 years, sector employers overwhelmingly identified customer service skills as
the most important (88%). Management and leadership was the next most important
future skills need (69%) according to employers. It is generally accepted in the sector
that managers often lack the experience to excel in their role and employers clearly think
this trend will continue. Tackling this need among management occupations could have a
profound impact on many aspects of the business and its workforce.
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Appendix A: Definitions used to produce this report
SIC Codes
 Accommodation (SIC code 55)
 Food & beverage service activities (SIC code 56)
 Travel agency, tour operator and other reservation service and related activities
(SIC code 79)
 Libraries, archives, museums and other cultural activities (SIC code 91)
 Gambling and betting activities (SIC code 92)
Tier 2 subject areas
 Hospitality and Catering
 Leisure, Travel and Tourism
 Travel and Tourism
 Sport, Leisure and Recreation
Apprenticeship Frameworks
 Active Leisure And Learning
 Advanced Spectator Safety
 Hospitality And Catering
 Leisure Management
 Leisure Operations
 Licensed Hospitality
 Live Events & Promotion
 Travel Services
 Travel And Tourism Services Leisure And Business
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