In last week’s referendum the UK made the momentous decision to leave the European Union.
This decision was in line with our recent poll of over 1,000 independent UK properties who were 56/44 in favour of leaving.
However, Brexit has had immediate consequences for the economy and the government. David Cameron has resigned, Nicola Sturgeon is calling for another referendum in Scotland and the pound has slumped to 30 year lows against the dollar and fallen against the Euro as many economists predict a period of volatility and a possible recession.
But this all sounds a bit abstract! So we decided to try and outline some of the more practical implications of Brexit. Here are three considerations for you:
It’s now more expensive for Brits to travel abroad:
With the pound falling rapidly against all major currencies including the Dollar and Euro it’s now more expensive for British holiday makers to visit the continent. This means we may see a rise in Brits holidaying within the UK. There is also a strong risk of inflation in the UK making imported goods more expensive and squeezing people’s budgets, so your customers will be cost conscious.
What can you do about it: There are plenty of amazing holidays to be had in all parts of the UK but you need to tell your story well! So make sure that your website and your profile on other travel sites really put your key selling points forward, ideally with amazingly good photography. Also, consider offering special rates to family groups staying for a week or longer to encourage them to book with you, remember, they will be cost sensitive and this could secure the booking!
It’s now cheaper for foreign tourists to visit the UK:
The weak pound means Americans and Europeans will be able to come here cheaply and their money will go further, with our rich history and strong tourism industry we could see a boom in foreign tourism.
What can you do about it: This is where you really need travel agency websites like Expedia, Booking.com and LateRooms, they will market you across the globe and make sure you reach those international guests. And, make sure you have the ability to take payments from abroad (credit cards or PayPal) so you can accept and charge those international bookings easily. Consider giving these travel agency sites some special offers over the summer. If the pound is low or decreasing in value, it may cost you nothing.
About the EU regulation:
There are two ways to leave the EU, Britain can do so quickly and unilaterally via an act of Parliament or negotiate its way out using “Article 50” of the Lisbon treaty. Most politicians and pundits believe we will take the latter route, as it is better for economic stability and a negotiated exit will be better for all parties. As such it will probably take Britain about two years to organise our exit from the EU and during that time, all current EU regulations remain in place, so there is no need to worry about changing working practices just yet. This is also true for anyone employing EU migrant workers: There will be few changes to the rules in the short term.
There are of course many uncertainties now, not least of which an obvious vacuum in the political landscape as we wait to see which leadership team will take UK out of the EU and, most critically, stabilise our market economy. But there are also some great opportunities for the UK’s fantastic B&B’s and Independent properties to take advantage of the current near term market. So good luck and please do get in touch to find out how we can help you tell your story online!
Sorry, but this article must have taken the whole 5min of a coffee break to put together, when I had an Email with a link to this platform I honestly thought someone had sat down and listened to what had been going on and come to a conclusion of where the Hotel Industry was going to next, other than talking about the slight, tiny fall of UK currency against the Euro, the fact that this will attract overseas visitors, wow, I never thought of that one!
So I Guess Eviivo does not have any idea what is going to happen, like all the rest out there.
Hi, Firstly I can assure you this took a little longer than 5 mins to put together, but, as always with these things the hardest thing to do is decide what to take out, as well as leave in. The truth is there are many unknowns and then there are the things we don’t even know we don’t know, no one has tried to leave the EU before! So, all we can guarantee is there is going to be turmoil and uncertainty, this is going to affect the hotel industry.
As I said above it will do this in 2 ways:
Firstly: Currency, it’s not a slight fall I am afraid, it’s a 9% fall in the value of the pound against the dollar and the Euro, let me put that in perspective: A family of four going on holiday to Europe in August would expect to pay £1100 + several hundred more in expenses, lets say £500 as an average. (according to research by Santander), well now that’s going up, the £1100 goes up by 9% = £1200, then £500 becomes 545, a total of £145 added to your costs, just like that. This will make holidays abroad less desirable and affordable, but it does more than that, it also makes everyday expenses more:
1) Britain is a net importer, everything from food to cars to iphones are going to get more expensive as our currency is worth less, so customers will have less income in the first place to spend on holidays, they’re going to be much more cost conscious, we may see trading down (from a 5* hotel to a 4*) and we will see people looking for deals. – We’ve lived in a very low to no inflation country since 2009, that’s a long time, and so this change will be a shock to people as inflation squeezes their budgets.
2) This will also make the cost of running a B&B or hotel higher, anything you buy that’s imported or sourced from imported goods will get more expensive, at the same time your customers have less disposable income so ensuring good occupancy and minimising waste become key. Alongside attracting foreign visitors feeling flush because of the weak pound.
And then there is regulation, what happens to labour laws, migrant workers currently working in UK hotels, and what happens to EU regulations? – Well we simply don’t know, all this will have an impact on your business but probably not for about 2 years as we strongly expect an article 50 type exit as said above.
Maybe I should have gone into more detail on this in the post above, but I wanted to make this short and digestible, not a thesis!
But, we do want to give more info and more clarity, so we’re doing research right now that we plan to publish in coming weeks to build on the above and dig into more details from the hotelier and the guest perspective. – Stay tuned!
I will try to be brief, perhaps by telling you that I have spent my whole life as a Manufacturer in both Engineering and the Food Industry, Property Flipping and a 10yr Period of Day Trading, before retiring here in the Central Auvergne, I presently run a UK Vacation Property Portfolio, yes all different animals granted, but a hell of a resume and a tool box full to the brim with everything you could possibly need.
Sorry, space is short, let me try and quickly cover a few points, Sterling Pound vs Euro/Dollar, this is nothing new, currency markets go up and down every day, like oil prices, like pork bellies, we will survive it and all in our stride as if it had always been so and if Sterling does fall, what will be the fall out, well it will merely strengthen our Home Markets, with major boosts coming from the overseas markets wanting cheap goods and we all love a Bargain and on the back of a falling Sterling we will see those Bucks and Euro’s flying in to the UK, all on the back of Tourism.
What FANTASTIC NEWS for the UK Hotel/Travel Industry this will be, things just keep on getting better, the outcome would be a sucking up of accommodation within the UK from those who will not pay or not wish to pay higher Holiday price’s Abroad.
What makes a Country a Good Exporter is the question you should have been asking yourself, if currency falls how will this benefit the UK, well, any Country given a reasonable level of technical knowledge and a Cheaper work force will produce all the goods necessary to export to our new partners, or maybe we might just end up with our old Business Partners including those in Europe, remember how much they sell to us, the answer is Lots!
Property slump, well let me start by saying that prices in property up to the period of Brexit her in the UK was artificially high with large discounts being offered (I own a property portfolio and have seen this 1st hand), well now these large (30% discounts quoted by the press) prices are being offered to eager overseas investors strapped with cash wanting to change currencies and invest in Cheap Property, they love us!
Just a Quick point on European Labour and our Hotel / Farming Industry, well in the paste we had Cheap Labour (black market) and we will simply pick up again, loop holes have always prevailed within HMIT and will continue to do so, will this change our industry – Not a Bit.
Just as foreigners will continue to arrive from the far reaches of the Globe skirting immigration to find work in our Restuarants/Hotel Kitchens/Cleaning Services as they do so in America only to be paid a pittance which to them represents riches and a way out for their family back home.
If I could sum up Brexit, then I would say this, I firmly believe that it will make the UK a much stronger Country with a Real Single Identity where other Countries of much larger standing such as China, Singapore, India, Pakistan, Malaysia, Korea, Australia, Russia, America * & Canada will be clambering to make trade deals with us with one of the biggest Financial Trade Center’s of the World, add to this all these Countries will need to hold and buy Sterling as a security.
* America will pile in with a new President due any minute soon, infact on the next boat from Scotland after he finishes his round of golf, you have to love him and I believe America does, he has stated publicly that he will support a Brexit Goverment added to this the Americans love us or is it just the accent?
Keith Spence
Here in the Auvergne
I’m sorry… A 30 year low against the Euro ?!? Well, it’s currently trading at 1.21 – The Euro was trading at 1.10 roughly 2 years ago. Very poorly written article. Can only see massive positives for the domestic and incoming tourism market based on these supposed ‘scares’ anyway.
Having read the article I would say that it isn’t going to win the prize form literature or investigative journalism. The only point I acknowledge with any confidence is that of, we won’t know what the impact Brexit will have for 2 years! The points about people will now be looking for deals and to save money is stating the bleeding obvious. People have and still are looking for deals. Its why they use the OTA’s in the vain hope it saves them money. It doesn’t when it comes to a smaller operator. It’s just they can’t be bothered to pick up a phone and talk to someone for fear of being told we don’t do deals. Who would let someone sell their own product for cheaper than they can?? A couple of viewings of some dumb tv programmes and a quick listen to that idiotic bespectacled journalist for tourism on the BBC and everyone is an expert. My tip for the best price, best room and best information is to actually call the hotel you like. On the point about people taking staycations. The clientele of my establishment rely on good interest rates for their savings to use as some of their disposable income. Because the rates have been so low they are taking fewer holidays as it now means eating into their capital. With rates going lower and interest on saving following the outlook has become tougher. I haven’t put my rates up for 5 years because of the economy and the local market. It will no doubt fall on the operators big and small to take the hit or absorb any rises in costs at the same time as people looking for silly deals. So should I double my price and then reduce them by 40% to give the public a sense of value when they are in fact being ripped off or do i act honest and sensible and keep prices at what I think people can afford and are willing to pay. Hope to still be in business when brevet has finished being implemented.