UK Hospitality Sector At Risk From Brexit Restrictions

The UK hospitality industry is more exposed than any other sector from immigration restrictions after Britain leaves the European Union according to corporate recovery specialists Quantuma.

Partner Graham Randall, a hotel and leisure specialist, says labour shortages seem to be inevitable.

“One in three people employed in the hotel and leisure sector was born outside the UK and the sector needs to have a long hard think about how it is going to address the issue of labour shortages.

“With strict migration controls on the horizon the competition for skilled staff will become intense as the pool of available workers reduces.

“We would expect recruitment difficulties in the hotel and hospitality sectors to intensify over the next two years”.

National coffee and food chain Pret a Manger recently revealed that one in 50 job applicants were from British nationals and they have expressed concerns over attracting staff after Brexit, adding it may take ten years to build a future talent pipeline.

In addition, a national accountancy practice recently reported that 1800 UK hotels have at least a 30% chance of becoming insolvent by 2020, citing competition from Airbnb and the introduction of the living wage as additional threats.

“The medium term outlook for the UK hotel sector continues to look challenging,” commented Mr Randall.

“With recent rises in food and beverage costs, an unfavourable exchange rate pushing up prices and internet comparison websites driving down prices, margins will continue to be squeezed.

“This will leave no available cash for essential maintenance and upgrades leaving hotels with weaker balance sheets struggling to survive.”