As the fallout of the UK’s monumental referendum result continues to make its mark, we can start to look at the impact the decision to leave the European Union will have on the country’s hospitality market.
Senior figures from various industries across the economy have been voicing their concerns about what the post-Brexit landscape will mean for them. As one of the top five employers in the country, the hospitality industry will feel an effect – both in the short and long term – likely positive and, depending on the type of deal the UK strikes with Europe, possibly negative.
One instantaneous positive was the increase in international bookings at UK hotels (especially from USA and China) in the immediate aftermath of the result. In York, for example, hotels saw an increase in international bookings with one property recording a 236% increase in bookings from America, while in Cambridge, Chinese bookings increased 6% and in the Lake District a 10% increase in international bookings was recorded at just one property.
It makes sense that this trend will continue; sterling’s weakness against other currencies will encourage tourists from those countries with the best rates to visit the UK, which will benefit the hotel industry. Likewise, with UK holidaymakers getting less bang for their buck (or pound…) on the continent, a rise in staycations will also have a positive impact.
The big fear, however, is the ability to hire people into the industry; with a high percentage of staff in hotels and restaurants coming from EU member states, a possible restriction on the freedom of movement between the EU and the UK could cause difficulties in bringing skilled workers from the continent. Speaking to the Evening Standard, Jeremy King of Corbin & King said: “As many as 94 per cent of EU workers employed in Britain’s hotels and restaurants would fail to meet existing visa entry requirements for foreign workers.”
This hinges entirely on how Britain approaches negotiations with the EU; the current dichotomy facing British negotiators is whether to give up access to the single market in return for tighter controls on immigration, or remain an active member of the single market and maintain current levels of freedom of movement. However, one would assume Britain will ‘extend a hand of friendship’ across the Channel to maintain a steady flow of skilled workers into its hotels. If not, this could mean a positive impact on British workers.
Likewise, construction of hotels could well be hit – both those already underway and future planned projects – with an uncertainty in pricing up labour and materials. However, on the flip side, a weaker pound could be a welcome thing for overseas investors looking to take a punt on some value.
But the hospitality industry has proved itself resilient in the face of uncertainty in the past. It will be again. Hoteliers will have to be smart to ensure revenue predictions are tightly controlled and continue to monitor competition – but not much will change from pre-Brexit. It is, also, in the government’s best interest to ensure the industry not just survives but thrives in the face of new opportunities and challenges.