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Brexit

With Brexit looming, the UK hospitality industry must invest to retain talent, study suggests

Hamish Kilburn

With two-thirds of hospitality works planning on quitting their jobs in the near-future, but what can be done ahead of Brexit to retain employees? 

Invest in your staff in order to retain them is the clear message to employers in the hospitality industry in light of new research from Caterer.com. A survey of 21,000 global hospitality workers released today reveals that two thirds (65 per cent) of hospitality workers plan on quitting their jobs in the near future. Worryingly, over half of those workers (59 per cent) plan on moving in the next six months.

The research explored the key attributes which tempt hospitality workers to explore new pastures. Findings demonstrate that career progression is the most important factor (16 per cent) showing employees want long term prospects within a company.  Surprisingly, salary (14 per cent) came in second, followed closely by training & development (13 per cent) – showing staff want to feel invested in by their employers.

“The industry is facing increased staffing and recruitment pressures due in part to uncertainty ahead of Brexit.”

The hospitality sector is big business and the UK’s third biggest employer[1], providing jobs to 2.9 million people (7 per cent of the working population). The industry is facing increased staffing and recruitment pressures due in part to uncertainty ahead of Brexit.

Highlighting the importance of the survey’s findings, Neil Pattison, Director from Caterer.com said, “The hospitality employers who show career progression opportunities will find it easier to attract new employees and retain current staff. With hospitality looking to be one of the hardest sectors hit post-Brexit, it’s fascinating to reflect on the clear call from workers for investment in their future. With 65 per cent of respondents saying that they plan to quit their job in the near future and high competition among employers, investing in your staff will help to alleviate the lure of a role from elsewhere.”

The survey of over 21,000 hospitality workers from across the globe highlights the importance of employment progression for retaining staff in what can often feel like a seasonal or transient industry.

The fast-paced nature of hospitality is a key draw for 12 per cent of workers, while teamwork ranked highly for 14 per cent of those surveyed.

The sector has seen a reduction in apprenticeships since the Apprenticeship Levy was introduced in 2017 with a low uptake from small businesses and in turn, less opportunities have been available for young people to enter the industry. The Autumn Statement saw the chancellor announce that the Government will half the amount small businesses have to contribute from 10 per cent to 5 per cent when taking on apprentices. – a move hoped to increase industry apprenticeships and on the job training.

Hotel Designs would like to know how your practice is preparing for Brexit. Please Tweet us @HotelDesigns

References available upon request

Main image credit: Pixabay

Brexit is impacting the hospitality industry

Brexit helps hotel insolvencies plunge

750 453 Daniel Fountain

UK hotel insolvencies has dropped by 18% in the post-Brexit market, according to new research by accountancy firm Moore Stephens.

The firm’s study shows that fewer than 1% of hotels in the country are at risk of becoming insolvent, due to the post-Brexit boost in tourism. Likewise, this was coupled with the drop in the value of the pound brought a 9% increase in international visitors in the first half of the year, statistics from the Office of National Statistics showed.

The UK has also seen an increase in the number of people choosing to take staycations and the number of inbound visitors has reached record numbers. Moore Stephens pointed out that despite the boost in tourism, Brexit has lead to uncertainty in the hotel sector with regard to staffing.

A KPMG report commissioned by the BHA earlier this year revealed that 24% of the industry’s current workforce is made up of EU workers.

Vincent Wood, partner and head of hotels at Moore Stephens, told The Independent: “The potential drying of this vital reservoir of staff is a problem hotels have faced for many years and it will be a real challenge for them in the coming period.”

Glasgow Pond Hotel Hotelroom © Leonardo Hotels

Brexit ‘no deterrent’ for Leonardo Hotels in European expansion

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The managing director of the UK’s newest hotel group has outlined plans to press ahead with further expansion to follow its impressive market entry in Scotland.

Daniel Roger, MD at Leonardo Hotels Europe, says the company has not been deterred by the Brexit and is fully focused on its growth strategy to create a strong portfolio across Europe.

The hotel group – which opened Leonardo Royal Hotel Edinburgh as its flagship Scottish unit after a £6.1 million refurbishment to the former Premier Inn earlier this year – has now taken over Portland Hotels, adding five more locations across Scotland to its portfolio.

The new Leonardo Hotels in Edinburgh, Glasgow, Aberdeen and Perth take its number of properties to more than 85 in 40+ locations, with Scotland representing a prime focus destination for further growth by the group.

But Daniel has stressed that plans for progression do not stop there. He said: “With the market launch in the UK two years ago (the opening of the Leonardo Hotel London Heathrow Airport), our main targets were to increase our portfolio and strengthen the recognition of Leonardo Hotels brand in Scotland.

“This plan underlines our latest coup, which is the takeover of the Portland Hotels with five properties in Scotland; expanding our portfolio to include two hotels in Edinburgh as well others in Glasgow, Perth and Aberdeen.

“Leonardo’s portfolio will grow to seven hotels with 1,048 bedrooms, which represents a significant strengthening of our presence in the UK, and Scotland in particular. And we still have a lot to offer.”

When asked about the impact of Brexit, Daniel was unequivocal in his response, saying: “We have just taken over five hotels in the UK. This is a clear statement.

“The ultimate target of the company is to promote and strengthen the brand Leonardo Hotels Europe-wide. Our future strategy is to continue our investment in growth and to have 100 hotels across Europe by 2020.”

The design of the new Leonardo Royal Hotel Edinburgh was the work of respected designer Andreas Neudahm and ties in with the group’s philosophy of creating sites which reflect their location. The Haymarket location aims to appeal to both leisure and business guests with excellent tram and rail links nearby and a generously sized car park.

Plans are also advancing for the five Portland Hotels to be rebranded as Leonardo Hotels, including proposals for some to undergo a refurbishment programme.

www.leonardo-hotels.com

NFU Mutual’s Hospitality Recruitment Guide, published this week, has revealed that a skills shortage is one of the key concerns for those in the hospitality and tourism industry

Research: Skills shortage a ‘concern’ for hospitality industry

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NFU Mutual’s Hospitality Recruitment Guide, published this week, has revealed that a skills shortage is one of the key concerns for those in the hospitality and tourism industry – with 45% of the survey’s respondents citing it.

Unsurprisingly, another issue for the industry has been the potential economic instability brought about by Brexit, according to 47% of respondents. When asked about their plans for Brexit, 85% of those who felt Brexit would impact the sector made no comment.

The impact of the National Living Wage was also listed as a key concern particularly for the hotel industry, receiving the votes of 35% of those representing hotels and 23% of the wider hospitality industry.

The guide has been created by NFU Mutual in partnership with the British Hospitality Association (BHA) and Reed Specialist Recruitment in a bid to provide advice to help senior hospitality figures address their concerns about skills shortage by encouraging them to recruit more young people into the industry.

Darren Seward, hospitality sector specialist at NFU Mutual, said: “Businesses we are speaking with are stressing the huge importance of EU staff to their operations, with real worry that Brexit will result not only in a smaller pool to recruit from but also skills and talent shortages.

“Some businesses already have plans in place for addressing these challenges – such as working more closely with schools and colleges – but in general, very few businesses appear to have done much planning and preparation for Brexit. While it’s difficult to prepare for an unknown, businesses should at the very least start thinking about how they would manage a changed employment landscape, which is how our Hospitality Recruitment Guide can help.”

The full report can be read here

Brexit Focus: European hoteliers remain confident in holiday market

Brexit Focus: European hoteliers remain confident in holiday market

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Despite the fact analysts have predicted a decline in travel across Europe from the UK following the Brexit referendum, hoteliers in major European destinations have signalled that the hospitality industry is remaining confident as several cities have seen an increase in hotel room rates in the last year.

Data collected during the summer period and released today by OTA Insight, the leading hotel revenue management solutions provider, reveals that seven out of eight leading holiday cities have seen significant increases in hotel rates since the UK voted to leave the European Union.

In a concerted effort to recover from its financial downturn, Athens has seen the most significant increase in room rates of 20 per cent, followed by Lisbon at 16 per cent. Copenhagen, which frequently tops the recent must-see lists has seen continued growth in tourism and bed nights coupled with an increase in rates on 14 per cent. Madrid came fourth at eight per cent, closely followed by Dubrovnik at seven per cent and the ever popular Madrid and Paris at three per cent. Nice was the only city which saw a decline in rates of one per cent.

Adriaan Coppens, CEO and founder, OTA Insight, said: “There has been a significant increase in hotel rates across Europe at a time when many would expect hoteliers to reduce prices in an effort to Brexit-proof their revenues. It is encouraging to see that there are still high and increasing visitor numbers of destinations across the continent and in turn hoteliers have the confidence to respond to this continued level of demand with an increase in rates. Hotel rates will inevitably decline in some destinations but overall the outlook for revenues is positive.”

Information is based on median best available rate data pulled for 30 June 2016 vs 30 June 2017, from a sample range of 3, 4 and 5 star hotels in Athens, Lisbon, Copenhagen, Madrid, Dubrovnik, Berlin, Paris and Nice for rates from 13 – 21 August 2016 and 12 – 20 August 2017.

British Hospitality Association responds to UK's EU migrants policy

British Hospitality Association responds to UK’s EU migrants policy

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The British Hospitality Association (BHA) has released a response to Theresa May and the government’s plans to ‘assess the economic contribution of EU migrants’ in the UK.

The Home Office launched an independent review into the impact of EU migrants on the UK economy after suggestions that new rules could be made for different industries.

Ufi Ibrahim, chief executive of the British Hospitality Association, said: “Over 700,000 Europeans work in hospitality and tourism and although we are determined to rely less on EU service workers over the coming years it will take time. In March KPMG published a report, commissioned by the BHA, which showed that in the event of free movement ending and no successor regime being put in its place the industry would need to recruit an additional 65,000 UK workers each year in addition to the ongoing recruitment of 200,000 workers to replace churn and to power growth.

“Our industry recognises that immigration policy needs to change however at a time when unemployment is at its lowest since 1975 we will still need access to the European workforce.

“The BHA has been campaigning for several months for an enlarged role of the Migration Advisory Committee and welcome the government commissioning the MAC to undertake a detailed study on EU workers with businesses throughout the country. We believe this should go further and the MAC should advise government on the number of visas for all strategically important sectors including hospitality and tourism, the fourth largest industry in the UK. Britain needs services workers as well as scientists and engineers and we look forward to having a serious dialogue with the Home Secretary as we get into the detail of a new immigration law,” she added.

Susan Bland - Redefine|BDL

In Conversation: Redefine|BDL’s Susan Bland on Brexit Plans

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As Brexit negotiations kick off and uncertainty lingers following the general election, there are growing concerns over the UK’s pipeline of skilled employees, particularly within the hospitality industry. Redefine|BDL Hotels’ (RBH) Chief Human Resources Officer, Susan Bland, explains why the hotel industry should keep calm and carry on attracting and developing the best talent.

The UK’s leading independent hotel management group has an expert team of over 110 hotel specialists based in offices in London, Glasgow and Frankfurt. Its portfolio of more than 45 properties unites over 8,000 rooms and 2,500 employees throughout its managed and leased properties.

In an industry that will undoubtedly be impacted by any final deal extended to the UK by the EU due to its employee demographic, RBH is already starting to make plans to strengthen its employee pipeline.

Susan, who chairs the Hotel Employers Group (HEG) – which represents the majority of the UK hotel industry’s biggest businesses – says that while Brexit negotiations will take time, attracting more home-grown talent is a much-needed step towards injecting new blood into the hotel industry, and should be the priority.

She said: “HEG is working closely with the British Hospitality Association (BHA) as it develops its Brexit strategy. It’s an impressive piece of work, which focuses on a 10-year plan including ‘rebranding’ the industry to make it more attractive to the UK workforce looking for long-term careers, by tackling the long-standing stigma of unsociable hours, low pay and the belief that hotel work is ‘just a holiday job’.

“It’s a strategy that is required regardless of the current political and economic climate – it just becomes more time-bound if we see the European employee pipeline dry up as a result of uncertainty or fear caused by ongoing Brexit negotiations.”

And while HEG is pulling together a comprehensive plan of action, RBH is working on attracting more home-grown talent and upskilling its existing employees.

Susan continued: “The HEG strategy is targeted at numerous groups across the UK, from ex-service personnel and their families, to the next generation of potential employees and their parents as influencers on career choice.

“At RBH we’re already working to herald the ‘return of the Saturday job’, as we call it. We want to work with young people to attract them to the hotel industry and instil in them a strong work ethic. We’re also developing our apprenticeship programme in line with the new standards and focusing on building on our great base of existing talent, such as developing our kitchen porters into chefs.”

While the focus is on developing and nurturing the UK employee pipeline, Susan does recognise potential issues that Brexit could cause for RBH and other businesses within the industry.

Of RBH’s total UK workforce, 27% are EU Nationals, but the figure rises to around 40 per cent in London – which is consistent with the UK average within the hotel industry.

She said: “So far, a number of our European team members have been sitting tight and waiting to see what happens as negotiations take place, but staff retention has been impacted to a certain extent following the EU referendum.

“The devaluation of the pound – which means some European employees haven’t been able to provide for their families as much as they had hoped – coupled with uncertainty has pushed a number of these employees to return home over the last year.

“However, we haven’t come across any issues in terms of recruitment. Our pool of applicants is exceptionally diverse, and there hasn’t been a substantial shift in our applicant profile, which is great to see.”

Although the most recent developments have seen the publication of plans for EU citizens to achieve ‘settled status’ – with the same residency, employment, health, welfare and pension rights – after five years in the country, uncertainty remains until these plans are confirmed.

And while there is an element of uncertainty, Susan is pleased to see the Government prioritising the rights of EU Nationals and the potential impact on free movement and the labour market as part of its negotiations in Brussels.

She said: “As a business, we had accepted that there would likely be some form of restriction around free movement, and removing uncertainty for European employees has always been key. I’m glad the Prime Minister is prioritising this.

“While the current plans would see those resident in the UK for five years granted ‘settled status’, there are still uncertainties around other EU Nationals who have lived in the UK for shorter time periods. On that front, if any restrictions were to be imposed, we would like to see these introduced via a phased approach.

“I’d be frustrated to see any EU Nationals tied into the existing sponsorship programme for non-EU workers, which is very onerous. Simplicity will be key.”

Susan – and the wider RBH team – will be focusing on factors within their control when it comes to Brexit, and urges employees and prospective industry employees to do the same.

She said: “The government is just weeks into negotiations. In the meantime, I’d urge anyone from Europe living in the UK and keen on working in the industry to take any and all available opportunities, and to get the required paperwork started if applying for citizenship is a consideration. The negotiations will take time, and it’s business as usual for us.”

www.redefinebdl.com

Queen's Speech - BHA opinion on Brexit

Brexit Opinion: BHA responds to Queen’s Speech

1000 593 Daniel Fountain

In a pared-back Queen’s Speech on 21 June, Theresa May’s Government set out its legislative agenda for the next two years.

The speech focused on Britain’s future outside the European Union with a focus on industries such as agriculture and fishing, along with the Great Repeal Bill and an Immigration Bill. A Travel Protection Bill will be introduced to protect holidaymakers by updating the UK’s financial protection scheme for holidays.

The speech opened with a promise to work with business to build consensus on Britain’s future outside the EU.

Ufi Ibrahim, the Chief Executive of the British Hospitality Association, said: “The hospitality and tourism industry, the fourth largest in the UK, looks forward to working with Ministers to build the widest consensus on Britain’s future outside the EU. The Government is already aware of the industry’s vital need to have continuing access, in the short term, to the EU labour market while we encourage more UK workers to take up a career in hospitality and tourism.

“We have also made clear that the National Living Wage should be decided by the Low Pay Commission after 2020.

“The trade bills announced to help British businesses export to markets around the world should also consider that tourism is the UK’s sixth largest export. With this in mind it is essential that the immigration system encourages, rather than deters tourism to the UK and allows visa-free access for Europeans.”

www.bha.org.uk

Brexit is impacting the hospitality industry, so says HBAA

Brexit A Year On: UKinbound demands ‘tourism priority’ in EU negotiations

750 372 Daniel Fountain

A UK trade association has called for the new government to review its approach and consider the importance of tourism to the country in the upcoming Brexit negotiations.

UKinbound says the general election results show that the electorate has rejected Theresa May and the Conservative’s vision of a ‘hard Brexit’.

The travel group is calling on any potential government formed by the Conservatives and Northern Ireland’s DUP to implement a strong sector deal and visa reforms, after 75% of its members stated these as the most important issues in one of its surveys.

UKinbound’s chief executive officer Deirdre Wells, said: “The general election result clearly shows that the electorate is against a hard Brexit, and so is the UK inbound tourism industry. Our members are calling for a continued strong relationship with the EU and the implementation of a sector deal that addresses issues such as the Customs Union, Open Skies Agreement and residency rights for EU workers. For inbound tourism to prosper long-term we need the Conservatives and DUP to champion our industry.”

With negotiations scheduled to begin next week, UKinbound wants to remind the government that the UK’s tourism industry employs more than three million people across the country and in 2016 was responsible for contributing over £22 billion annually to the UK economy.

UKinbound wants the Government to address the following points during Brexit negotiations:
• An immigration system flexible to business needs – residency rights for EU workers
• Continued access to the Open Skies Agreement
• Visa-free travel between the UK and the EU
• A strong narrative promoting the UK as a welcoming destination

Brexit is impacting the hospitality industry

Brexit A Year On – Opinion: ‘Perfect storm’ on the way for UK hospitality industry

750 453 Daniel Fountain

Heidrick & Struggles , a premier provider of executive search, leadership consulting and culture shaping worldwide, spoke to Chairmen and Chief Executives from some of the biggest organisations in the industry, representing businesses with revenues of over £40 billion and employing more than a million people across the UK. While views on their specific business or sector could vary, the overarching theme was one of significant concern.

The report by Heidrick & Struggles, in partnership with the British Hospitality Association, found a range of issues worrying industry leaders. Most notably, rising costs are high up the agenda, with the fall in the pound following Britain’s decision to leave the EU having a huge impact on the cost of key imports that is yet to be felt by consumers. One CEO complained about the cost of butter, with an increased cost to her business of 46%, while another was seeing meat costs rise by 29%. This will mean higher bills for diners and holidaymakers, but according the majority of CEOs, consumers are yet to react negatively to price rises because the majority of these costs are yet to hit them.

Businesses in the sector are anticipating a recruitment gap of over a million jobs by 2029, according to a report by the BHA and KPMG earlier this year, which would mean the industry would need to recruit 60,000 UK workers in addition to sustained recruitment of 200,000 more per annum to meet the demands of growth. Filling these openings would likely be impossible without hiring migrant workers. Firms are heavily reliant on European workers, with half of CEOs reporting their workforce as 25-50%European, with more than a third of those businesses hiring EU citizens to fill 50-75% of their workforce.

According to the report, post-Brexit the hospitality industry pay bill will increase by £1.4 billion in the first year, and could rise by just over £1 billion a year over three years, amounting to a total cost of £3.2 billion. Wider economic changes are also adding to the pressure for the hospitality and leisure sector as business rates rise, and the apprenticeship levy and pensions auto-enrolment begin.

Ben Twynam, Partner at Heidrick & Struggles, said: “We have seen real concern from the most senior people across the hospitality industry, not only about talent and other Brexit-related concerns, but due to a number of headwinds facing the industry. With the cost of imports continuing to rise, increasing prices for customers and an expectation of decreasing consumer confidence in 2018 and 2019, there are a number of challengers facing businesses across the sector. While industry leaders are relatively confident about the remainder of 2017, they are far more pessimistic about the two years thereafter, when the real impact of Brexit will come to fruition.”

Ufi Ibrahim, the chief executive of the British Hospitality Association, said: “It is no exaggeration to say that hospitality and tourism face a perfect storm which is well articulated by our industry’s top executives in this report – a looming recruitment crisis caused by cuts to come in EU immigration, rising costs on both materials and labour, increased business rates and a tax regime that favours our European competitors. We have been urgently discussing these matters with the last government and will do so with the next. Our 10-year strategy to encourage more UK workers into the industry has been well received and we have confidence that with government support we can continue to grow what is the fourth largest industry in the UK.”

The hospitality and leisure industry is the fourth-largest employer in the UK, with 4.5 million people working in more than 180,000 businesses across the country.

Brexit is impacting the hospitality industry

Opinion: HBAA – ‘Brexit is having impact on hospitality industry’

750 453 Daniel Fountain

Just over half (52 per cent) of hotels, conference venues and booking agencies say that Brexit has had a noticeable impact on their businesses, with 7 per cent saying that it has had a major effect.

These are among the key findings of a survey of Hospitality Booking Agents Association (HBAA) members in the run up to the first anniversary of the referendum on European Union membership. The survey also found that 20 per cent of members felt that Brexit had had an impact on their ability to recruit staff while 80 per cent said that it had not had any effect.

Observations from members as they completed the survey give interesting insights into where the impact has been seen. They reveal a range of different issues and both positive and negative results.

HBAA logoDiane Waldron of the QEII Centre in London said; “We have seen an increase in enquiries from international clients as London has become a more affordable destination for their events.” LaiHa Diamond from the Kingsway Hall Hotel echoed this, reporting an increase in business from the USA, as did Jonathan Byrne of the Royal Foundation of St Katherine, also in London, attributing extra business from Europe to the weakness of the pound.

Hotel and venue members outside London did not report such benefits from the exchange rate. Instead several said that it had increased the costs of imported food and beverages. Giving an agency perspective, Penny Banyard of First Choice Conferences & Events reflected the views of many members by saying “Clients are much more cautious.”

Recruitment
Looking at the recruitment aspect, Sally Raith-Riches of Foxhills Country Club & Resort said; “If we can’t recruit from Europe across our Food and Beverage departments this will have a severe impact. But until this is confirmed we will continue with business as usual.” However Rajesh Vohra of Sarova Hotels commented: “Recruitment was a problem area before Brexit, but now it is a major issue, and it is getting materially worse by the day.” Philip Allsopp of Lea Marston Hotels also noted; “Recruitment has been difficult for many years, I think the Brexit debate is masking the problem. We need to look at more creative ways to engage people to want to work in our industry.”

The survey then asked whether members expected to change their recruitment policy in the near future. 12 per cent said they would while 88 per cent replied “No.”

Brexit is impacting the hospitality industry, so says HBAA

Brexit is impacting the hospitality industry, so says HBAA

However, looking further ahead, Mark Jones of Wyboston Lakes commented; “Whilst we have not experienced any notable changes to date, we expect recruitment to become tougher as we end 2018 and enter 2019. At that time we do expect that recruitment policies will have to change and anticipate that if we are to continue attracting sufficient talent from the UK and worldwide, we will have to provide accommodation to facilitate this.”

Summing up the overall viewpoint, several members including Sean Philby of Carlson Rezidor Hotel Group and Marc Webster of Jury’s Inn said that it is too early to know the impact of Brexit as most of the trends so far may be short term and not exclusively attributable to Brexit. Only once the post Article 50 negotiations have progressed will the effect be clearer. Louise Goalen, HBAA Chair and MD of Bela Events commented; “We all have our own different experiences and opinions about the impact of Brexit so it is valuable to have an industry wide ‘snapshot’ with which to benchmark them and to provide an overall view. As our members say, it is early days and the variety of impact even seems to vary regionally. It will be very interesting to ask again them a year and two years from now.”

www.hbaa.org.uk

More and more people are opting for a 'staycation' in the post-Brexit era

Post-Brexit ‘staycation’ boom worth extra £1.4 billion to UK economy

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The positive impact of the UK’s Brexit decision on the domestic hotel market was revealed last week as official figures show billions of pounds staying in the United Kingdom.

While the surge in UK holidays after the 23 June vote had been predicted, the findings by the Tourism Alliance exclusive to the Mail on Sunday show a huge rise both in visitors from abroad and in Britons opting for a staycation – worth some £1.4 billion to the UK economy.

The extra takings in 2016 for staycations alone are set to be £2.4 billion, according to the findings, whose members include the British Hospitality Association, ABTA and regional tourist boards. While £1 billion of that was spent before June 23, the total additional staycation income for the whole year is expected to be £1.4 billion.

BHA calls for 'Seaside Tsar'
The falling pound since the Brexit vote has made holidays more expensive for Britons going abroad and cheaper for foreign tourists coming here – giving Britain’s tourism a double boost. It all means the industry is set for a record-breaking year, and factors believed to be adding to the boom include the recent good weather, low interest rates and fears of terrorism overseas.

The Tourism Alliance estimated that spending by Britons on UK holidays has been up by 17 per cent on 2015 so far this year. Alliance director Kurt Janson told the Mail the additional £2.4 billion has the potential to create around 40,000 new jobs in tourism and hospitality.

Top photo (Cary Arms): Patrick Goff

UK hotel investment hits £2 billion in H1 2017

ISHC: The impact of Brexit on tourism industry

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The International Society of Hospitality Consultants (ISHC) is the leading source of global hospitality expertise and counsel, represented by some two hundred of the industry’s most respected professionals from across six continents.

ISHC also functions as a key industry figure, providing a resource for expert opinion on timely and topical matters facing the hospitality industry. With the vote for Brexit now a reality, ISHC have put together a panel of experts to give their opinions on how Brexit will affect the hospitality and tourism industry.

Brexit Viewpoint from Ireland – by Weldon Mather Founder & Director of WM Consultancy Ltd and ISHC Member

The Brexit result stunned most of the European business community, and has had some immediate consequences. While sterling has weakened, inbound visitor arrivals to the UK should increase and while London’s performance has been positive up to April, year-to-date May RevPAR was down 3.0% to £99.88 (US$146.63), as a result of a 2.7% decline in occupancy. Regional UK saw RevPAR increase by 2.2% to £46.87 (US$68.80). Britons may be less inclined to travel overseas however initial indicators have not shown any decline in the pace of overseas bookings. However, the outbound tourists to the Republic of Ireland (in particular from Northern Ireland to the Republic of Ireland which is divided by a 300 mile land border) may be threatened by weaker sterling and potential border restrictions.

Dublin - effect of Brexit
No other country will be affected more that the Republic of Ireland as a result of Brexit, which accounts for more than 50% of all exports to the UK. Over 43% of inbound visitor arrivals to the Republic emanate from the UK and it is estimated that the Republic’s GDP could be impacted by up to 2% when, and if the UK separates from the UK. On the positive side, as the only English speaking and Euro denominated country in the EU, Ireland stands to gain greater FDI as a beachhead into the EU that may see City of London financial services relocate to Dublin, attracted by a more benign 12.5% corporation tax.

Short Term and Long Term Consequencesby Herbert Mascha, Managing Partner of MRP Hotels and ISHC Member

In the short term devaluation of the BPD makes the UK more attractive to tourists and shoppers, especially from US. The devaluation of the EURO against US$ makes EU destinations more attractive to tourists from outside EU. Tourists from UK could be less in destinations like Spain, Greece depending if people cancel their trips because they are facing reduction of value of BPD or reductions of their incomes in the near future.

For me most importantly, investments into new hotel developments or renovations may be put on hold because of uncertainty; we still have a lot of projects on hold because of the latest crises. The long term effects really depend on how the EU and UK agree on their future relationship. If Brexodus of agencies, banks and companies happens, this could cause a shift in business travel to other destinations as well as investment in hotel infrastructure in the new destinations.

post-Brexit
Long Term Implications
By Aris Ikkos Research Director INSETE and ISHC Member

Considering long term implications, one has to think what will be the impact of Brexit on the EU (and the world at large), not just Britain. Should the EU dissolve (fully or partially) by similar –exit referendums in other countries as well, we will be living in a completely different world and it is anybody’s guess what it will look like. My guess is that it will be much more uncertain and much more autocratic. In this sense the impact of Brexit may be more important outside Britain than inside the country.

Immediate Effects – by Christophe de Bruyn Director of TOURISM & LEISURE Indra Business Consulting and ISHC Member

Immediate effects are and will increasingly be cancellations of booked but unpaid holidays by UK citizens and a lower volume of last minute bookings from UK citizens.
In the midterm until Brexit procedures are clear and currency stabilise we could see a reduction of UK trips abroad and lower spending, which should lead tourism destinations, hotels and resorts to look for substitute clients to cover UK clients’ reduction. There was a similar situation last year with Russian tourists and several years ago when Germany went through a minor internal economic crisis of minor growth.

Greece - impact of Brexit
Tourism from the UK to Greece
– by Aris Ikkos ISHC Research Director of INSETE and ISHC Member

We did some analysis for inbound tourism from the UK to Greece and the euro/pound exchange plays a crucial role, while the level of UK GDP measured in pounds is less important. Our analysis has shown that the average spend, in UKP terms, is remarkably stable. If you add to this the uncertainty surrounding the British economy at the moment and the fact that many Britons book their holidays at a maximum 2 months before departure, we expect a significant negative impact this year.

ishc.com/

Peter Ducker, CEO of Institute of Hospitality

HD Summit speaker profile: Peter Ducker, CEO Institute of Hospitality

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The Hotel Designs Summit takes place on 12-13 September at Radisson Blu Hotel, London Stansted, and as well as fantastic networking opportunities and invaluable meetings, attendees will have the chance to hear talks from influential figures from the hotel and hospitality industry.

One of this year’s speakers is Peter Ducker, CEO of the Institute of Hospitality. Peter was born into a hotel family and has remained in the industry ever since. Ahead of the event in September, he speaks to us about his talk…

Q. What’s your background and career in the industry?
A. Having been born into the industry, I went on to graduate from Oxford Polytechnic (now Brookes…) in Hospitality Management. I then worked in hotel management before moving into sales and marketing. I then held board positions at various hotel companies; both private and public.

With this experience, I then launched and managed a hotel reservations company, which I sold in 2005. Since then, I have advised hotel companies on sales, marketing and distribution before taking my current role as CEO at the Institute of Hospitality.

Q. What will you be covering in your talk at the Hotel Designs Summit?
A. I’m planning to review the important “take-aways” from the conference and draw the themes together for attendees.

Q. What, in your opinion, are the current three most important challenges the industry is facing right now?
A. Undoubtedly the fallout from Brexit. Beyond that, cost inflation for operators as a result of the National Living Wage and the Apprentice Levy and thirdly the recruitment and retention of key staff in important roles.

Q. Where do you see the future of the industry headed?
A. Growth across the sectors is going to be one of the key issues. Also, the ongoing drive for standards will play a big role as well as the ongoing pressure on the independent sector from brands, particularly in the restaurant sector.

Q. Why do you think events like the Hotel Designs Summit are important?
A. With so much change and uncertainty in this current climate, it is vital that hospitality professionals meet in different forums to exchange views and seek inspiration.

Q. And lastly, what piece of advice would you give to hospitality professionals?
A. Make sure you remain focussed on your key metrics, keep investing in upskilling your staff, and always keep your eye on industry trends.

hoteldesignssummit.co.uk
If you would like more information on attending the event, please contact Jade Oliver on j.oliver@forumevents.co.uk or 01992 374054

Brexit is impacting the hospitality industry, so says HBAA

Opinion: Hotel industry faces ‘opportunities, challenges’ post-Brexit

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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.

British Hospitality Association statement on the referendum

British Hospitality Association: Statement on EU referendum decision

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In the light of the result of the EU Referendum vote, Ufi Ibrahim, the CEO of the British Hospitality Association (BHA), has released the following short statement on behalf of the Association’s membership.

Ufi Ibrahim, CEO of the BHA said: “The EU referendum question represented a profound moment for the future of our industry. Hospitality and tourism benefits from a flourishing economy and any level of uncertainty will have an impact. The United Kingdom’s withdrawal from the European Union is the beginning of a process which could take years.”

“On Monday 27th June the British Hospitality Association is convening its members, industry and political leaders to discuss economic and political ramifications in the short term. We will be framing a plan to ensure that we have a seat at the table on all negotiations including taxation, immigration and regulation.”

“As we go through this process, the BHA will call upon every politician in this country to do all they can to guard the strong reputation that our industry has built representing a hospitable and welcoming country all around the world. Our industry is one of the key drivers of exports, prosperity and the fourth largest employer supporting 4.5 million jobs.”

 

www.bha.org.uk

UK hotel property market

Has the UK hotel property market reached a plateau?

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The UK’s hotel market saw its first decline in average RevPAR (rooms revenue per available room) in four years during the first three months of 2016 adding further fuel to the suggestion that the peak of the hotel property market may have been reached.

According to the latest Hotel Bulletin: Q1 2016, published by HVS, AlixPartners and AM:PM, a poor start to the year for hotels in Aberdeen saw RevPAR fall by 37% year-on-year, skewing overall results across the 12 cities analysed. Even excluding Aberdeen’s results, the overall market grew by only 1%, its lowest increase since Q1 2012.

While London remains a popular destination for Russian and Chinese visitors and investment continues to pour into the city, hotels in the capital saw RevPAR decrease by 2% in Q1 2016, their fifth consecutive quarter of flat or declining figures.

“These figures give us a strong indication that the peak of the UK’s hotel occupancy market has been reached and the growth we are seeing now is rate driven rather than occupancy driven,” said HVS chairman Russell Kett.

“For the moment there continues to be strong interest in hotel investment in most parts of the UK, which could continue into 2017, but investors are currently delaying decisions because of uncertainty fuelled by a combination of terrorism concerns, the forthcoming Brexit vote, China’s economic situation and the US elections.

“There is a risk that some operators will cut rates in an attempt to stimulate demand, forcing competitors to follow suit. Once room rates fall across the hotel sector the likelihood is that values will soften. This is a big concern for London’s hoteliers, particularly with the large number of bedrooms due to open in the next 12 months unless demand starts to pick up again,” he added.

According to Hotel Bulletin the best performing city in Q1 was Cardiff, with an average RevPAR increase of 8%, largely due to the World Half Marathon Championships in March. The fact that demand has not been constrained by new supply means that Cardiff has been in the top three best performing cities for the past four quarters. Since December 2011 only 18 new bedrooms have opened in the city.

Birmingham was the second best performing city in Q1, with RevPAR growth of 7%, despite supply growing by nearly 800 bedrooms over the past two years. Investment in Birmingham airport means that this trend is likely to continue as new flight routes come on stream.

The hotel sector has long been seen as a barometer of the wider economy, says Hotel Bulletin, albeit with inevitable regional variances. In recent months there has been a modest but perceptible shift in sentiment, especially in the investment community where a much greater sense of caution is being adopted over future growth prospects.

Download the Hotel Bulletin: Q1 2016 by clicking here…