Inbound tourism and investment is on the up and we must react, says Robert Crook, Interstate Europe Hotels & Resorts UK managing director
When faced with uncertainty, the British people are renowned for their determination to succeed. And now that the decision has been made to leave the EU, we need to work with each other in order to make us stronger.
We as an industry must pull together. Industry leaders need to share their knowledge to ensure the tourism and hospitality sectors manage and adapt to changes in the market quickly and effectively.
Yes, there will be challenges ahead. We are an industry reliant on freedom of movement, both in terms of our customers and our staff, but there will also be opportunities that we must be prepared for. All industries, from retail to manufacturing, will have the same challenge, and one has to believe that if we are all ‘working the problem' we will find solutions and make the most of the situation we find ourselves in.
Areas on the traditional tourist trail, such as London, Cambridge, York and Edinburgh, will undoubtedly fare better, but tourists in search of the best-value deals will also filter outwards into other areas. Rethinking how we engage with these potentially new markets will be very important.
However, the pound's decline does present some potential problems for our industry, which we need to manage effectively to minimise their impact. Costs will rise for hotels and restaurants as the price of goods, such as linen, guest supplies and furnishings, imported or sourced by suppliers from outside the UK, increase. We are also seeing the price of imported food and beverage rise - salmon and bacon and certain wines, for example. Menu re-engineering and reviews of the selling price will require thought and planning as part of the overall strategy to managing costs.
For this reason, I think we'll start to see an increase in sourcing locally (providing the pricing is right, although supply and demand would suggest some inflation here also), but the potential for increased overheads, supply chain costs, development costs and raw materials does risk slowing down the development of new hotels and restaurants, especially if these raw materials are coming from overseas.
However, when it comes to development, we are seeing an increase in investors looking to purchase assets in the UK through overseas funds, meaning we could see a spike in the number of new entrants who will have plans to invest in and perhaps revive undercapitalised properties.
Equally, existing hotel owners may hold on to their properties longer until pricing and values stabilise, slowing down the traditional churn we usually see taking place.
It is important that as an industry we remain positive and keep focused on how we can achieve sustainable growth. Yes, it can be difficult to do that through the noise of the media and their scaremongering headlines, but I am confident that as long as we all work together to search for solutions and show a willingness to adapt to whatever comes our way, the UK's tourism and hospitality industry will continue to succeed and thrive.
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