Hundreds of hotels could be left vulnerable
Close to 2,000 hotel businesses nationwide could be placed at risk of insolvency as a result of Britain’s decision to leave the EU.
A disconcerting new study has suggested that the outcome of last summer’s referendum campaign could lay a heavy burden on many firms.
In the immediate aftermath of the vote for Brexit it appeared that the hospitality sector had been one of the chief beneficiaries.
The slump in the value of Sterling contributed to a record number of overseas visitors last year and encouraged more Britons to holiday at home.
Despite this, there are a number of other factors which may pose a problem for a growing number of businesses.
Profit margins are set to be squeezed by an increase in the price of food and drink, proving that the current fluctuations in currency are likely to prove a double-edged sword.
There is also the matter of a rising wage bill following the introduction of the National Living Wage. It is expected that around half of staff in the hospitality sector will see their pay packets expand following the changes to the statutory wage floor.
And while the number of tourists coming to the UK has risen, this is likely to be balanced against a drop in the number of business trips – depleting a valuable revenue stream for many hoteliers.
Of the 1,800 hotels understood to be at considerable risk of insolvency, it is believed that smaller premises make up a substantial proportion.
These businesses have suffered as a result of the growing popularity of price comparison sites – pushing a large group of customers in the direction of budget chains – and the fact that they’re often located in quieter parts of the country, somewhat removed from the main tourist destinations.