The UK’s hospitality industry has been through the wringer over the past few years, as it’s faced a barrage of consecutive blows that would be enough to bring almost any other industry to its knees.
These challenges can be traced back to political issues, worldwide crises, and crippling economic conditions. But somehow, the sector as a whole is still standing. So, check in and enjoy your stay: here’s a quick guide to some of the biggest challenges that the sector has been up against.
Brexit
Many economists argue that ever since the UK left the European Union, the economy has never truly recovered. The event had a monumental impact across all of Britain’s industries, with experts estimating that the move costs the UK economy between £65 billion and £100 billion every year. Though some have been hit harder than others, hospitality has arguably come out of Brexit the worst.
Before we left the EU, hospitality relied heavily on staff from EU countries, but since freedom of movement has ended, a significant number of EU workers left or never came back. Since then, the industry as a whole has limped on in this regard – struggling to fill roles in kitchens, front of house teams, and even in senior positions, largely because the domestic workforce on its own isn’t enough to meet the demand. What’s more, reduced labour has contributed to rising wages in lots of hospitality jobs because businesses have had to compete harder for staff.
On top of that, doing business has become increasingly difficult for those who are reliant on importing stock and ingredients from EU suppliers. Now, there’s simply more red tape. Businesses face more checks and regulatory requirements which didn’t exist in 2016. All of this extends timeframes for these businesses to get the supplies they need and has increased operational costs.
Pandemic
The pandemic naturally had an immediate impact on the UK’s hospitality sector, just as it did with just about every industry on planet Earth. From hotels in Hereford to restaurants in Romford, revenues collapsed overnight, millions of workers were furloughed, and a lot of businesses needed to take out emergency loans just to stay afloat, while thousands of other venues shut their doors for good.
Ever since 2020, businesses in the sector have been feeling the lingering aftereffects. They’re still paying back debt from loans taken out during the height of the pandemic, and have needed to adapt to a post-COVID market where consumer habits have shifted to prefer the comfort of delivery options, and are more selective with their spending.
Dire Economic Conditions
So after a starter of Brexit and the Covid-19 pandemic for the main, what’s for dessert? Could I interest you in some ludicrously high inflation and a subsequent cost-of-living crisis? Or perhaps some delicious tax increases?
The cost-of-living crisis caused a two-front war for the hospitality sector. On one side, customers weren’t spending. On the other hand, energy bills and supply costs went through the roof, along with increased interest rates from the Bank of England.
On top of that, the current government has increased national insurance costs for businesses, meaning that every employee costs them more.
Closing Thoughts
After a decade-long storm of chaos, uncertainty, and rising costs, the UK’s hospitality industry is long overdue for some time in the sun. With recent rumblings of growth for the UK economy as a whole, we might start seeing some gaps in the clouds soon.
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