How Brexit could impact hospitality and other low-income sectors

You’d be forgiven for being a little fed up with the term ‘Brexit’ by now. C’mon let's get over with it. It's like this one friend who always complains about the relationship but never change something. They say Brexit is like the Titanic. 52% of the population said: “Yeah smash this Iceberg, go right through it!” The other 48% had watched the movie before.

 

The last three years have seen the media dominated by our impending exit from the EU, with the country feeling a prolonged period of economic uncertainty. But with our departure now set to be on the 31st October, we are just weeks away from Brexit actually happening and many businesses have already begun to prepare.

Update 17/09/2019: There's a new Deal when I am posting this Article

 

While the country as a whole will be affected in different ways, many low-income sectors have already begun to feel the pinch.

So, we can only hope that things will straighten themselves out as quick as possible and that in the future the country will once again find prosperity, the immediate impact of Brexit isn't looking quite so positive.

 

Below we’ll take a look at how the hospitality industry and other low-income sectors could be both negatively and positively impacted by Brexit in the coming months.

 

1. Staffing and recruitment

 

One of the biggest areas to be affected by our departure from the EU is staffing and recruitment.

Over the past three years, the hospitality industry and other low-income sectors such as retail and catering have faced struggles with hiring efforts.

This is in one small part thanks to the reduction in numbers of EU nationals coming to the UK, and this is set to become even lower after Brexit.

These industries rely heavily on seasonal workforces and freedom of movement from visitors and foreign nationals, something which will be seriously affected in the wake of Brexit.

 

On a more positive note, this reduction in EU workers means more jobs available to British professionals, though sadly this could have mixed results.

It is a reality that EU workers are cheaper labor and their British counterparts might not be willing to match their salaries.

This could mean rising costs for employers in these industries.

What’s more, over half (56.3%) of employers in the hospitality sector have already said that they don’t think there’s enough talent in the UK to fill their roles, meaning the skills gap will continue to widen and many businesses could be left understaffed as we approach the festive season.

 

When I was a Restaurant Manager in Central London, we couldn’t barley find Chefs and Bartenders. In Central London. I don’t want to imagine how it is outside the capital.

2. Supply chains and food shortages

 

Another immediate impact of Brexit will be the imposition of trade tariffs, particularly if no deal is reached, which looks increasingly likely at this stage. Goods and materials such as food, which are being imported into the UK could see a significant increase in price.

What’s more, with new tariffs and regulations being imposed on imports and export from the UK, there will be more demands on ports and entry points to cope with these new custom demands.

 

This could cause shortages and significant delays on goods coming over to the UK in the immediate aftermath of Brexit.

These goods are vital for industries such as hospitality and catering to be able to function, and could have a knock-on effect on their revenue and growth. While this could cause initial difficulties for low-income sectors, we can only hope that once the dust settles the UK will be able to draw up trade deals that are mutually beneficial and see prices dropping in the future.

 

3. Travel and tourism

 

With the freedom of movement compromised, there could be some immediate travel delays post-Brexit.

This could lead to a drop in tourism and therefore less being spent on industries such as hospitality and tourism.

In 2017 visitors to the UK pumped an estimated £24.5 billion into our economy, sadly these figures have already begun to decline, dropping by 7% to £22.9 billion in 2018. Travel disruptions between the UK and European countries could see this getting worse in the coming years.

4. Conclusion

 

That said, it’s not all doom and gloom, with many low-income Brits relying on cheap package holidays to Europe, we could see the rise in the popularity of staycations.

It’s likely that the rising cost of traveling to Europe, as well as new visa regulations, means that holidays across the pond won’t be as cheap and easy as they once were. This could encourage Brits to take a domestic holiday instead, putting money back into key industries such as hospitality, retail, and tourism.

 

What are your thoughts about this whole Brexit Mess? Will there be a No Deal? Please let me know in the comments.

 

Yours,

Dan Draper