Written by Prateek Adhikari, Lecturer in Hospitality and Business at the University of Derby Online Learning (UDOL).
Exit of Britain from the European Union has wide-spread implications for the hospitality industry; some of these implications may have short-term effects while others will become tangible in the long run.
Devalued pound makes UK more affordable to visit
The devaluation of the British pound that followed the vote to leave the EU, has made Great Britain a more affordable place to travel to. This may boost the hospitality businesses in the UK, especially with staycations recently soaring and international tourist visits increasing. According to a research by William Reed HIM Research and Consulting, small and independent hospitality industry employers felt positive about leaving the European Union and the employers believe that their current relationship and the business will continue as normal.
Healthier long term relationship between employers and skilled employees
In the recent years, many hospitality businesses have started to rely on workers from the EU countries, who got into work with no or little prior experience or training. According to the British Hospitality Association report, approximately 700,000 people employed in the local hospitality, originate from the EU.
The challenges posed by Brexit can eventually be overcome by companies reinforcing their HR strategies in terms of mindful recruitment and consistent training, which is crucial for an industry with high level of staff turnover. Besides, opportunities for the local residents willing to work in the industry may increase. Overall, over time, the transformation may create a healthier and mutually beneficial working relationship between employees and employers.
Reduced tourism VAT to 5% could attract more visits/higher spend
In terms of tourism development, the British Hospitality Association suggests that the UK hospitality industry could also benefit tremendously if the government lowered the tourism VAT to 5 per cent.
The research conducted by Deloitte/Tourism Respect found that this measure can boost the investments in coastal seaside towns that operate small independent hotels, pubs and cafes. Dermot King, Chairman of the Cut Tourism VAT campaign, says: “Tourism is the UK's only major export subject to 20% VAT, double the rate of the EU average”. The measure is thought to significantly decrease the UK’s Balance of Trade deficit as well as increase the tax take.
There is a big deal of speculation within the hospitality industry about Brexit, and it is unclear how it will affect the industry in the long run, especially now a general election has been called. However, now that the negotiations between the UK and the European Union have begun, plenty of opportunities may be discovered by those who are enthusiastic about building this bustling and exciting industry under new circumstances. Focusing on the positives instead of feeling discouraged by complications, we can take the industry to the next level.
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