Business, Innovation and SkillsWritten evidence submitted by the British Hospitality Association


The hospitality industry is broadly content with the provisions on services in chapter 4 of the draft Bill.

“Reasonable care and skill” is a fair implied term for the provision of services.

Earlier suggestions of a statutory guarantee would potentially have created difficulties for hospitality businesses.


1. The British Hospitality Association (BHA) represents the hotel, restaurant and catering industry. Our members range from international hotel chains to local bed and breakfast associations to independent restaurants and contract caterers. The hospitality industry comprises some 160,000 businesses, of which 81% have fewer than 10 employees (source: People 1st, Sector Skills Council). Overall employment in the industry is some 2.68 million (source: Oxford Economics) and total turnover of hospitality and tourism is estimated at some £120 billion.

2. The BHA responded in September 2012 to the consultation on consumer law reform and we are grateful to BIS officials for involving us in both collective and one-to-one meetings before and during that consultation period and during the recent consultation on the draft Bill.

Will the Bill have an Impact?

3. We do not think that the services provisions of the Bill as drafted will have a major impact on our hospitality industry. This is largely because businesses already strive to offer good service and generally make amends where that service does not meet expectations. There is no statistical proof of this, beyond noting that the overwhelming majority of consumer generated reviews on sites such as TripAdvisor are positive about the experience.

4. This is borne out by the impact assessment which puts the extra costs arising from the Bill of having more complaints (76,000) and the resulting increased costs of remedying them at between £2.6 and £5.4 million a year across all sectors. Hospitality businesses serve 8.3 billion meals a year and overnight guests spend some 150 million nights a year in hotels and similar establishments: against this scale, the extra costs implied by the Bill are minute.

5. This suggests that the Bill’s impact on our sector will be small. This view is assisted by the wording of clause 51 with the expectation of performance of services being “with reasonable care and skill.” This is what customers already impliedly accept in a hotel or restaurant. We are therefore content with this.

Satisfactory Quality

6. We were pleased to see that the earlier suggestion of a statutory guarantee, based around an expectation of “satisfactory quality”, does not appear in the draft Bill. If customers were aware of such a right, we could envisage a risk of some demanding a free meal or stay, claiming that the quality of provision was not “satisfactory”. It would be very difficult for the business to prove the opposite.

Unfair Terms

7. Schedule 2 of the draft Bill lists contract terms which “may be unfair.” The list includes: “a term which has the object or effect of requiring that, where the consumer decides not to conclude or perform the contract, the consumer must pay the trader a disproportionately large sum in compensation for services which have not been supplied.”

8. We understand that this wording is aimed at leisure centres/fitness gyms, which charge a monthly membership subscription and where a decision not to continue with membership gives rise to a “penalty” payment. A number of hospitality businesses operate or host fitness clubs and are concerned that their terms of business in relation to monthly subscriptions could be questioned because there is no definition of “disproportionately large” in the Draft Bill.

Private Actions in Competition Law

9. We were pleased to see the inclusion of these provisions in Schedule 7, opening up the possibility of trade associations being able in certain circumstances to take action on behalf of their members against anti-competitive practices.

14 August 2013

Prepared 20th December 2013