Britain’s exit from the EU or “Brexit”, as it is popularly referred to, has left a significant impact on global industry. With service sector industries like airlines already feeling the heat, the hotel industry may feel the effects of Brexit very soon. In fact, many reputed hotel chains are already seeing falling stock prices since June 24 in the aftermath of Brexit. We attempt to get an insider’s perspective on this impact of Brexit while also assessing what we know on the subject so far.
What we know
Migrant workers will be missed
About 70% of all hospitality workers in London are migrant workers. With the UK no longer part of the EU, that could have a big effect, particularly if employers have to pay more to get people to do these jobs. Not to mention, the possibly huge effect on prices.
Stifled travel for UK citizens
While travel to the UK may now be less expensive for travelers from the U.S. or the EU, the reverse impact—that of it being more expensive for UK travelers to holiday in the EU or the US or elsewhere could have a negative effect on tourism numbers.
Speaking of travel, here’s a round-up of comments collected from various companies and organizations in the hospitality space, about what Brexit means to their businesses.
What the industry has to say
“It’s a good job we’re better at running an airline than political campaigns. Britons are booking our £9.99 seats in record numbers in what will be the last big seat sale of its kind, as they look to flee a country which will be run by Boris, Gove and Farage.”
“In light of the reported vote in Britain to exit the European Union, Marriott International will closely monitor the implications of the electoral decision. It is too early to know what potential impact the decision will ultimately have on our business. As the implications are more clearly defined over the coming months, we will work to adapt to any changes that may result while continuing to deliver the best experience for our guests and remaining committed to our employees.”
“TripAdvisor respects the democratic choice that the United Kingdom made through its vote to leave the European Union, but also recognizes that the decision is causing distress for many U.K. and E.U. citizens who were hoping to stay united. It’s too soon to tell what, if any, impact there will be to travel and tourism but despite the unknowns, TripAdvisor remains committed to our presence in the United Kingdom and our employees there. We are also committed to supporting and enabling a strong tourism and hospitality industry in the United Kingdom, the EU and globally.”
Starwood Hotels & Resorts
“It’s too early at the moment to understand what the impact of the out vote will be on the country and on the hospitality and tourism industry as a whole, but we will continue to work hard to promote the UK as a destination and our hotels in this market.”
Global Business Travel Association (GBTA)
“While it is impossible to immediately assess the implications of the result on the UK, European and global economy and on international relations and world order at this point, GBTA remains committed to the same principles it always holds strong: ensuring business travelers maintain freedom of movement, business is not disrupted, travel infrastructure remains strong and programs and bilateral agreements that facilitate safe and secure travel like the EU-US visa waiver exemption continue. As the UK and EU move forward with the next steps, GBTA will advocate for these principles.”
World Travel & Tourism Council (WTTC)
“We are entering a period of market uncertainty which will undoubtedly put pressure on travel and tourism businesses, however we know that our sector is resilient and we expect business and leisure travel to hold up in the face of these challenges.”
InterContinental Hotels Group (headquartered in the UK)
“IHG is a global business with operations in nearly 100 countries. While the U.K. is an important market for us, it accounts for less than 5% of our overall global business, with Europe accounting for approximately 10%. At this early stage, there are still a number of uncertainties around what the U.K.’s exit from the European Union will mean for businesses, however, we are very used to dealing with volatility and will manage the situation as it evolves.”
For some travel suppliers, however, it’s still business as usual.
Etihad Aviation Group
Ethiad’s President and CEO James Hogan summarized this mindset best when he said “In running a global aviation group, we have to deal with war, pandemics and economic challenges. The one good thing is that people will still travel. It’s business as usual.”
Do you agree? Will it be business as usual for the EU and UK travel industry or is this the beginning of a significant period in their hospitality sector? Tell us your thoughts on Brexit in the comments below.