The approaching Brexit might become a real trouble to the hotel industry of the country. According to Moore Stephens, a UK based accountancy, as many as 1,800 hospitality companies in the UK might encounter troubles in coming years.
At a glance, it looks like weaker pound opens up new prospects for the tourist industry of the country, but in fact there is a hidden danger in that. While top destinations in the UK become more affordable to tourists and more tempting for the British, less popular locations are likely to have to cope with drastically decreased demand. Hotels and restaurants are to face one more problem growing food and beverage costs due to unfavorable exchange rate and thus growing import prices.
The possibility of the living wage introduction may also become a trouble for hotels in small towns. As a significant part of hotel workers are 25 or older, the living wage problem would affect nearly half of all people who work in the hospitality industry of the UK. Small companies also have to deal with a bunch of problems such as increased commissions for booking websites, increased marketing costs, the abundance of budget chains and newer competitors like Airbnb.
Even though weaker pound gears up tourism to the UK, these are mostly leisure tourists, while business travel industry has slowed down since the Brexit referendum. This might also cause problems in the long-term prospect. According to Moore Stephens, in order to fill the gap, hotels need to attract higher-spending tourists, for example, more Europeans and Americans.