Brexit - Good or bad news?.

Brexit - Good or bad news?

With the Brexit negotiations set to begin very soon it is difficult to see whether the end result for the hospitality sector will be positive or negative. We will weigh up both and bring you our own verdict.

The good news:

One positive that may come out of Brexit is an even further increase in "Staycations' for domestic residents. As prices for holidays abroad rise for UK residents due to a weak Pound Sterling this will, and already is, resulting in more UK family’s spending money domestically in the hospitality sector.

On top of this more American and Europeans are visiting the UK due to the exchange rate, and this does not look likely to change in the near future.

The bad news:

Due to Brexit there is now a large amount of economic, political and social uncertainty. This means consumer confidence is much lower and people are holding onto their money whether it is consumers, businesses, suppliers, the government etc.

Therefore spending will likely reduce in the short term making the hospitality sector weaker as a result.

Also there is a worry of staff shortages. We have covered this in a previous post but we will cover it briefly again. As we do not know what the UK will agree with the EU regarding free movement of people we are also unsure of whether we will lose our EU workers who come over to the UK and do a lot of jobs in the sector.

It is estimated at least 15% of the industry workers are made up of EU citizens alone, which works out at over 675,000 people. This leaves a gaping hole that would need to be filled and it may be very problematic to do so.

Verdict:

Our opinion is that in the short term the hospitality industry may struggle following Brexit, but just be propped up by an increase in Staycations. The long term is then completely up to the industry itself, the government and consumers as to how each will react and deal with the long term consequences of leaving the EU.

However one thing is for certain, the government will need to work closely with the industry to make sure the outcome is ultimately positive. Otherwise all of the UKs progress in the hospitality sector might be in vain.


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