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Brexit, labor concerns abound in minds of UK hoteliers
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Courtesy: Terence Baker | Courtesy: | News Source:

MANCHESTER, England—Conversations among British and Irish hoteliers at the Annual Hotel Conference are dominated more than ever by discussions of how Brexit negotiations continue to stutter.

Parliament is due to meet this Saturday to discuss Brexit—marking only the fourth meeting the body has held on Saturday since 1939. In the past, Parliament met on a Saturday at the outbreak of World War II, and most recently MPs met to discuss what would become the Falklands War in 1982.

The AHC’s theme this year was “Unlock the potential.” The brand companies say they are winning share, the independents say they are nimble, and everyone else says those who will adapt will survive.

Pressures abound. This year, hoteliers are concerned about increased labor costs and decreased consumer confidence. Staffing is another minor nightmare, with fewer people 18 to 24 years old entering the labor market next year than ever before, a squeeze that is due not to be over until 2030. The Scottish government said last week that it needed net migration to continue if it was to see growth in its hospitality industry increase by its target of 5%.

According to UKHospitality statistics, 27.9% of turnover in the United Kingdom is consumed by payroll, while operating costs only amount to 6.6% of the pie, and 64% of business owners feel they are paying significantly or moderately above what they should be paying for business rates.

The U.K. is not in a recession. Growth is expected to be just above flat, and that is growth. But those who will survive—and flourish—will be those who significantly differentiate themselves in the minds and booking decisions of their guests, and that will take risk.

The question then is who is up for risk when the U.K. and the European Union are still in what some might call discussion, others a stalemate.

Quotes of the day
“A third of (U.K. hotels’) margin has been wiped out solely due to regulatory changes such as the National Living Wage. … but as far as staffing is concerned the cliff-edge fear about labor has been pushed back.”—UKHospitality’s CEO Kate Nicholls

“We are looking for technology that has DNA that can be used across all our brands … and technology that simplifies, integrates and makes smooth the processes for our teams.” —Carla Milovanov, SVP of digital and information technology for Europe at Accor.

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