As the UK ponders and pontificates on the whys and the wherefores, the ifs and the buts, the whens and the hows; we take a look at a couple of ways Brexit might affect you. Being realistic, ‘best guesses’ are about as good as it’s possible to get as the tide of twists and turns continue unabated.
But before we turn to the crystal ball, here are some facts: First, and perhaps most obvious, is the fact that the value of the pound has fallen dramatically; and this has created an immediate uplift in the fortunes of the hospitality sector. It’s cheaper for foreign visitors to come to the UK, so more of them are doing just that.
And it’s more expensive for Brits to holiday overseas, so increasing numbers of us are choosing to holiday at home, again providing a boost to UK tourism businesses.
A recent survey of UK inbound members puts some numbers to business confidence in the sector: shortly before the referendum, 42% of members were optimistic about business prospects in the coming year; and when surveyed again a few months later that number had risen to 67%.
But that’s measuring ‘confidence’, which is rather vague. What about actual numbers? Look at Visit Britain’s statistics for August 2016, and you’ll find that visitor numbers and visitor spend are both up – not just for the month of August, but consistently over the year. Hence that sense of confidence.
How long the pound will stay low is anyone’s guess, and pretty much every expert opinion differs from the next, which is probably not surprising given the lack of detail about how the whole thing’s going to unfold.
So perhaps the best advice on this front to the hospitality business is ‘make hay while the sun shines’, and keep watching that pound.
But how, exactly, should you make that hay?
Brits are holidaying at home, so target the home market and emphasise how people can make their money go further by exploring the countless wonders the UK has to offer; whilst by far the biggest source of the increase in foreign tourists is America, so if you’re going to pick just one overseas market to target, that’s the one.
So far so good then. But now we come to the question of Marmite.
Jokes aside, the recent ‘Marmitegate’ spat between Unilever and Tesco does of course point to highly likely price rises on food and pretty much everything else it takes to run a hospitality business; so again the implications for your own business need to be addressed and planned for.
Here at Out of Eden, we’re watching closely to see how the anticipated price increases on all sorts of products and raw materials may affect the hospitality business, and we have to be realistic in saying that there are some danger signs.
For instance, beyond the inevitable impact of foreign exchange rates, all of us in the industry should also be prepared for potential price increases in raw commodities such as sugar and cotton, because let’s face it, we all use rather a lot of both of those.
In conclusion, we believe that the best approach during this period of uncertainty is to keep calm, keep yourself well informed, keep your options open and adaptable, be realistic and fair with your pricing policy, and remember that with change there often comes opportunity – if you’re prepared and ready to grasp it.