Steve Cassidy, managing director of Hilton in the UK and Ireland, has voiced concerns that a series of policies are hindering job creation and investment, disproportionately affecting young people. He advocates for a reduction in the tax burden on businesses to stimulate hiring and generate more entry-level positions within the hospitality sector.
Cassidy stated that the hospitality industry could be instrumental in addressing youth unemployment but requires supportive policies. His comments align with those of Fiona Eastwood, chief executive of Alton Towers owner Merlin Entertainments, who noted that the UK expends more resources on supporting unemployed youth than on facilitating their employment.
These remarks follow a report by Alan Milburn on youth unemployment, which cautioned against the UK facing a "lost generation" potentially reliant on out-of-work benefits. Currently, the unemployment rate for individuals aged 16 to 24 stands at 16.2%, an 11-year high, with over one million in this age group classified as NEET (not in education, employment or training).
Cassidy emphasized that while efforts like apprenticeships and training are valuable, they will be ineffective if employment costs continue to rise. He cited increased National Insurance contributions, business rates hikes, a proposed holiday tax, high VAT, and energy costs as factors squeezing the sector.
He pointed out that the average hotel's business rates bill is projected to increase by 115% over the next three years. Additionally, an Oxford Economics analysis suggests a proposed levy on overnight stays could decrease tourism spending by £1.8 billion and lead to 33,000 job losses annually. The current 20% VAT rate on hospitality in the UK is noted as one of the highest in Europe.
Cassidy called for specific policy changes, including reducing VAT on hospitality from 20% to 10%, introducing National Insurance tax breaks for employing individuals under 24, and implementing significant reforms to business rates. He suggested learning from other nations that prioritize hospitality and tourism in their growth strategies, warning that a lack of competitiveness could lead to investment shifting elsewhere and a weakening of the sector's job creation capacity.
He highlighted that hospitality is the largest employer of young people in the UK, with nearly 39% of its workforce aged 16–24. Hilton alone employs over 17,000 people across its 200 UK hotels. Cassidy believes that modernizing apprenticeships, investing in technical education, and strengthening employer-school connections are crucial steps, but these must be accompanied by measures to alleviate the financial pressures on businesses.