Hospitality leaders concerned by instability

20 June 2016 by Katherine Price

Hospitality leaders' confidence in the economy has decreased, they feel politicians are out of touch with the industry, and 74% said they would vote to remain in the EU, according to a new report.

The survey from the British Hospitality Association (BHA) in partnership with global search firm Heidrick & Struggles, spoke to 41 chief executives, chairs and managing directors at Britain's leading hospitality companies, including Casual Dining Group, Travelodge, Whitbread and YO! Sushi.

Consumer confidence

Politics and government

The majority of those interviewed felt that relations with government had not improved in the last 12 months, citing the recent changes in the rates of the National Minimum Wage as a prime example. This was done with little or no consultation with the hospitality industry. Although the Living Wage itself was not viewed negatively by the majority of participants, all commented that their businesses needed time to plan.

Brexit

At the time of asking (January - April 2016), 74% of business leaders said they would vote to remain in the EU, with only 18% wanting to leave. The remainder (8%) were undecided. One interviewee said: "The idea that we can get divorced and will remain the same is unthinkable - we cannot contemplate a world where Britain is isolated."

For respondents who are part of a global or pan-European company, building barriers feels counterintuitive to growing the business. The European president of one global brand said: "Anything other than staying in works against our businessâ€¦ but we have to be more ambitious for the UK's place in the world."

BHA chief executive Ufi Ibrahim (pictured) said: "This second leaders report from the BHA and Heidrick & Struggles provides a critical snapshot of opinions on current key issues from senior figures in one of the UK's most important sectors. They feel that the economic recovery is fragile and consumer confidence easily knocked. This, together with the uncertainty and lack of clarity in the referendum debate, is already having a detrimental effect on the industry.

"They also share a feeling of frustration that government is still out of touch and is failing the industry, due to an apparent lack of interest when it comes to policy development for tourism and hospitality. Given the size and importance of the hospitality and tourism industry, the significance of these views cannot be ignored."

Ben Twynam, who leads Heidrick & Struggles' travel, leisure and hospitality practice in the UK, added: "Brexit is just one example of the many uncertainties facing business leaders at the moment. It is vital that the hospitality industry is able to adapt quickly to changing circumstances. At the same time, it is increasingly difficult to foresee where these game-changers are going to come from."

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