Hospitality Sector Vital to EU Growth, Study Finds

A new Europe-wide study by EY, released Tuesday, shows the hospitality sector plays a critical role in fighting youth unemployment and is essential for jobs and growth and the health of other sectors.

The study, backed by HOTREC and The Brewers, found that one in 13 jobs created in the EU is in the hospitality sector, and that over half of the people employed in the sector are under the age of 35.

There are about 40,000 different beer brands in Europe. Three-quarters of the 2-million jobs generated by beer in Europe are to be found in the hospitality sector. Photo:: Cerveceros de Espana

Any reduction in the hospitality sector would disproportionately affect Europe’s youth, as the sector provides many of Europe’s first-time jobs, the study said. The hospitality sector provided 29% more jobs in 2010 than in 2000, whereas in the wider economy during the same period, the total number of jobs increased by just 7.1% or less than 1% per year. 

In 2010, the sector directly or indirectly created 1 trillion Euro in output, equal to 8.1% of the EU’s total economic output, and that the multiplier effect of €1 spent in the hospitality sector means another €1.16 invested in the wider economy.

According to the study, which includes country-by-country reports, the sector in 2010 contributed 126 billion Euros to government treasuries in excise duties, Value Added Tax (VAT) and employment and social security taxes, and supported approximately 16.6 million EU jobs, or one in every 13 jobs.

 "Measures adopted in times of austerity, which increase tax rates at a time when disposable incomes are falling, are likely to undermine the ability of the sector to generate growth,” said John Hopes, lead author of the study. "The short term response to this is likely to be cost cutting measures, and later, a loss in permanent capacity.”

Beer brewing was identified as a major economic driver in the sector. There are more than an estimated 40,000 different beer brands in Europe. Three-quarters of the 2-million jobs generated by beer in Europe are to be found in the hospitality sector, said Pierre-Olivier Bergeron, Secretary-General of the Brewers of Europe.