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Government urged to act quickly to address Brexit uncertainty

24 June 2016 by
Government urged to act quickly to address Brexit uncertainty

The Government has been urged to act quickly and calmly to address Brexit uncertainty and provide clarity on the exit process to minimise its short term effects on tourism and hospitality.

The UK has voted to leave the EU after 43 years, sparking the pound to fall to its lowest level since 1985 as uncertainty hit financial markets. As a result Prime Minister David Cameron has announced his intention to step down in October.

British Hospitality chief executive Ufi Ibrahim said now was the time to keep calm and ensure that hospitality was at the table when decisions were taken for an independent Britain.

"It will be incredibly important as there will be so much uncertainty as there is so much to be reviewed," she said.

"It will take a very long time so we need to keep calm and make sure our industry gets the best seat at the table especially around decisions on immigration and taxation. It will be critical that our industry is under consideration when decisions are made. Informing them now is critical."

According to STR Global, the Brexit vote could hit travel confidence, particularly for business travel. Meanwhile, weaker domestic hotel demand would also be likely as a result of weaker GDP, consumer spend and higher unemployment, it said.

However, in a statement it added: "By contrast, a smooth transition and a continued perception of London as a positive place to visit and do business could accentuate positive price effects.

"While Oxford Economics predicts that the longer term impact on overall domestic economic activity will be negative, there is a potential positive impact for the hotel industry, due to increased affordability of the UK and London as a destination, derived from a weaker exchange rate. However, some uncertainty is likely to remain, not least from the potential long-run impact of lower investment, which would continue to affect business-travel decisions."

Vociferous pro-leave campaigner Wetherspoon's Tim Martin called for a period of calm, reflection and discussion.

"Some people will now be anxious, but concentrating on these immensely important factors will provide reassurance," he said.

"Anxiety about the economic effects of independence during the campaign was misplaced.

"The UK will thrive as an independent country, making its own laws, and we will work with our good friends and neighbours in Europe and elsewhere to ensure a positive outcome for all parties.

"The most important factor now is to work together for our mutual benefit."

Amaris Hospitality chief executive John Brennan said that the hospitality sector should be capable of remaining stable, particularly with a weak pound encouraging inbound tourism.

"While the negotiation period could have an affect on the markets overall in the short-term, the hospitality sector is well-placed to remain robust during this period," he said.

"International tourism is one of the most rapidly growing sectors of the UK economy as disposable incomes increase around the world. With sterling weakening on this news, the rest of the world will get more pounds for their currency, making the UK a cheaper destination to visit, and conversely making it expensive for Britons going abroad."

British Beer and Pub Association (BBPA) chief executive, Brigid Simmonds: "It is vital that the Government acts quickly to secure economic stability and protect consumer confidence. We will be vigilant to ensure the Brexit negotiations do not harm our exports abroad and the competitive position of beer and pubs in Britain."

UKinbound expressed its disappointment in the result, which it said would have far-reaching consequences for members. However, chief executive Deirdre Wells said that tourism was a resilient industry.

"The Government must now work hard to secure a deal which supports our vibrant industry, which relies on the European Union for two-thirds of its business," she added.

"The priority must now be to ensure that our members have the best possible environment in which to grow their business and to support them in welcoming visitors from all corners of the globe."

The Forum of Private Business suggested the vote was an opportunity to tackle the red tape that was stifling small businesses.

Managing director Ian Cass said: "Politicians now no longer have the excuse of EU interference and need to act quickly and effectively to offset what as most economists believe will be a period of uncertainty. This means the UK's 1.3 million employers will need support in managing this period of disruption if it is to continue to drive the British economy."

And Association of Licensed Multiple Retailers (ALMR) chief executive Kate Nicholls said: "The EU referendum will, in time, prove momentous. However, for the moment, business will and must continue as normal. In the months ahead, while the impact of the decision unfolds, the ALMR will work closely with the Government and its agencies, to protect the commercial interests of our members. We are reassured to hear from the Governor of the Bank of England that he is fully prepared to back the UK economy and support British business and that clear messages should reassure consumers, investors and operators.

Hotel investment professionals reject Brexit at Market Connections >>


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