- staff shortages already being experienced as a result of the Brexit vote;
- the increase in minimum wage;
- the introduction of the apprenticeship levy;
- the growing threat of Airbnb. Weaker pound as a result of Brexit encouraging more tourists to visit the UK
Less than 1% of hotels are now deemed to be at significant risk of going insolvent* as the weakened pound as a result of Brexit has helped attract high volumes of tourists to the UK, says Moore Stephens, the Top Ten accountancy firm.
Data from the Insolvency Service shows that there has been an 18% fall in the number of hotel insolvencies in the last year – to 80 down from 98.
Moore Stephens says that the influx of tourists taking advantage of a weaker Sterling is a major driver in the reduction of financial stress in the sector.
According to the ONS, international visitor numbers to the UK rose by 9% in the first six months of this year – to 2.5 million people.
Moore Stephens adds that more British people are also choosing to go on ‘staycations’ – or remain in the UK for their holidays – as a cheaper alternative to going abroad.
Moore Stephens explains that whilst Brexit may have had a negative effect on some UK businesses, those in the hotel sector have clearly benefitted from the effects of the vote to leave the EU.
Moore Stephens, however, warns that hotel businesses continue to face a number of challenges – and should not become too complacent despite the current upturn in trading. They say that issues affecting the sector include:
- Hotels will wait with interest to see the outcome of the Competition and Markets Authority’s investigation into hotel booking websites, announced in October.
Vincent Wood, Partner and Head of Hotels at Moore Stephens, says: “Brexit hasn’t come without its challenges for the hotel sector, however.”
“They are, for example, the impact of staff shortages as the flow of European nationals – who make up a large proportion of their staff – into the UK reduces.”
“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.”
Jeremy Willmont, Partner and Head of Restructuring & Insolvency at Moore Stephens, says: “Hotel businesses have been dealt a great hand with Brexit.”
“The weaker pound has had the dual effect of attracting more overseas visitors to the UK – as well as encouraging UK nationals to holiday at home, rather than going abroad.”
“The key for hotel businesses is to not take the current upturn for granted and ensure that costs do not get out of hand.”