With Brexit looming large, we asked a panel of International Society of Hospitality Consultants (ISHC) – aka the leading source of global hospitality expertise and counsel – for their opinions on how Brexit will affect the hospitality and tourism industry.
Why Brexit is bad for business
Jonathan Worsley, Chairman of Bench Events and ISHC member
Why make access to 500 million people difficult?
“The UK was a basket case before joining the EU in ’73 and since then has had the fastest growth rate of all European countries including Germany. Why economically would you leave this success story and the access to a market of 500 million people and also the 58 countries that the EU has negotiated lower or tariff free access?
We should pay attention to what the institutions are saying
The US Federal Reserve, The Bank of England, IMF, OECD, WTO, The Economist, LSE, the Institute of Fiscal Studies amongst many others have all said that the UK economy would suffer if it left the EU. The OECD has said that GDP could be 5% lower by 2030 following Brexit. These independent institutions are warning us of economic decline following a leave vote.
600,000 new jobs?
The Travel & Tourism industry employs 12.7% of the UK’s workforce (4.3m) and the WTTC forecast states that the industry will have the potential for a further 600,000 new jobs by 2026. In London, 69% of the hospitality workforce are not born in the UK and nearly a third of all hospitality managers are migrants. Without access to the EU labour market, how will companies fulfill job vacancies which in turn will power UK GDP and pay for an ageing population requiring more social services and the NHS?
EU born citizens
EU born citizens living in the UK are contributing more to the UK economy with an 81% employment rate, which is 7% higher than those born in the UK.
Studies show trade negotiations take 28 months (based on a sample of 88 regional trade agreements from 1988 to 2009) and we would need to complete up to 58 (feasibly up to 1 for each country) such negotiations over a 2 year period to get to the same place we are now. Robin Rossmann, managing director of STR said “CEO’s also cannot wait 2 years to find out if the UK manages to secure trade deals. They will need to start taking action straight away to reduce the risk that the trade deals don’t materialise by moving portions of the company offshore onto the continent (or at a very minimum ceasing investment they would have otherwise made).”
As Lord Sugar said: “You don’t sort something out by running away from it, you stick with it and make it better.” And if the UK puts as much effort into reforming the EU as it would have to in order to make a success of Brexit, the UK and the EU would both be far better off.”
The impact on tourism
Herbert Mascha, Managing Partner, MRP Hotels and ISHC member
“In case of Brexit there could be a short term impact on tourism caused by changes of the exchange rates between British Pound, US dollars and the Euro. Other than a terrorist action or a natural disaster, a vote for Brexit would be the starting point of a long-term process and it will not have an impact on people’s short term travel plans. What will happen in the long term is impossible to say. A consequence of a vote for Brexit could be a slowing of investments as investors are going to wait how the situation is developing. This could be the case in UK and in the rest of the European Union.”
The impact on Ireland
Weldon Mather, Founder & Director, WM Consultancy Ltd and ISHC Member
“The imminent UK Brexit vote is being watched closely from neighbouring Republic of Ireland, which could be severely impacted by weaker sterling (Ireland is the only English speaking county in the Eurozone) and renewed border controls along the land border. Most businesses in Ireland are hopeful that Britain will vote to remain within the EU, as a major trading partner with the Republic and the source of over 50% of overseas visitors to Ireland. A weaker pound and potential renegotiation of trade agreements would not be beneficial to Ireland’s recovering tourism industry and could dampen GDP growth by as much as 2-3%.”
Whatever your opinion on the debate, The Sybarite urges you to go out and VOTE TODAY.
By Kaye Holland