A Confederation of British Industry survey of the sector, which earns Pounds 30 billion a year, reveals an education system in which practical work is stifled by regulations and employers' failure to pool resources in order to buy affordable training from colleges.
Skills shortages, particularly in the food industry, have led to a recruitment crisis in a sector which draws heavily on school-leavers. The findings will reinforce arguments voiced in the review of the 16-19 curriculum by Sir Ron Dearing, for a wide range of core skills including a foreign language for all.
The CBI survey, Filling the gaps: skills for tourism, shows that the hotel and catering industry has an increasingly poor record on training and staff retention. Image is also part of the recruitment problem.
"An image related to seasonality, conditions of work and in some cases relatively low pay may, for some, detract from the excitement of employment in the industry," says a report on the survey. The CBI insists that "a particular priority must be to improve careers guidance and advice".
The deeper problems of inadequate training and college lecturers' lack of practical and technical knowledge of the industry were also identified by business leaders.
Schools and colleges are losing out to private training providers who are seen as more aware. Almost half (48 per cent) of respondents said they were failing to provide what industry needs. Only 22 per cent had similar complaints about private trainers.
But colleges argue that the industry is not investing enough. One education and training provider said: "Local employers vary in their specific training needs. They also feel they do not have the money for training linked to the colleges."
Seven per cent of the entire workforce - 1.5 million people - are now employed in tourism, but the industry is losing out in the world market. Britain's share has fallen from 6.7 per cent to 4.3 per cent over 15 years.
Businesses surveyed said they wanted: craft or practical skills, customer care skills, financial awareness and languages.
* Eric Forth, Minister of State for Education, told The TES this week that suggestions of early release from school to work for some 14-year-olds were "a non-story".
Secretary of State Gillian Shephard was more circumspect, but insisted there was no suggestion of cutting across the demands of the national curriculum, which would take at least 60 per cent of a pupil's time.
The new General National Vocational Qualification Part I would, however, give many 14-year-olds work experience linked to pre-vocational education and training. The newly-merged departments for Education and Employment have also given training and enterprise councils Pounds 200,000 for five pilot schemes, including work-based training for pupils excluded from schools.