18 May 2017

Where is the industry leadership?

35 industry professionals were surveyed during the event

  • Only 20% were confident following Brexit and an even smaller number were feeling confident for next year.
  • Less than 5% are confident in the trade bodies for the industry.
  • There was absolute consensus over the need for industry bodies to have a more active role in bringing businesses together.

Bob Cotton, former Chief Executive of BHA and Non-Executive Director of IndiCater, was the key speaker. Bob shared his thoughts on why Brexit is opening a completely new scenario that will bring opportunities for the UK and in particular the hospitality sector. He argued that figures are show how the industry has grown over the recent years and Brexit has strengthened the sector. Yet, many are still deeply concerned about the long term performance of the sector.

Bob shared his optimism that whilst there are many questions and concerns going forward, business is there and the industry will grow. A point that was picked up and echoed by many in the room – hospitality has a great track record of overcoming all sorts of problems and working on solutions which make a positive impact.

How is the hospitality sector responding to Brexit?

When the full room was surveyed only 20% were confident following Brexit and an even smaller number were feeling confident for next year. Although eating out is part of social life, many felt that SMEs and individual businesses will feel the most impact. This could create new opportunities for British and local production so that we will not be strongly dependent on imports.

Does leadership need to come from within the sector?

It was suggested the private sector has to make decisions because the government lacks the knowledge of the sector. When asked, none of the room said they were confident in the trade bodies for the industry. There are now many trade bodies in the sector and they do not work together to create a coherent aligned approach. So there is a need for greater cohesion within the sector, where big companies can take the lead on the issue and have an open and proactive discussion with the institutions on how the sector should respond to challenges such as employment issues and inflation.

The hospitality sector currently employs 442,000 EU migrants (restaurants and hotels). How is the industry going to address staff shortage?

Businesses should make an effort on supporting the current workforce so that they feel welcome in the country. In London 70% of hospitality staff are from overseas and the demands for staff are increasing. There are some who think we are in for a tough ride with Brexit because of an over reliance on imports and migrant labour. However others feel they can create systems and processes which can overcome these current situations.

Three key areas were at the core of today’s discussion:

  1. Macroeconomic changes: How Brexit is going to impact the British, European and Global economy? Food inflation is definitely one of the most immediate effects impacting customers’ disposable income.
    However, as food cost increase for a retailer’s, customers will have to understand the pricing point change is a natural consequence.
    Businesses should not be afraid about increasing their price however there is a concern that customers will stop consuming because of their lack of confidence in the market.
  2. Employment: hospitality will have to face a major skills gap that will need to be addressed. With a huge amount of overseas professionals working in hospitality, any change in the migration policy will have an
    effect on the industry. Although work permit schemes can work for the UK it raises many concerns in terms of employer’s liability and how it should be regulated. Other industries such as construction and agriculture will be experiencing the same problem, especially because along with hospitality these are very dynamic sectors with high turnover.
  3. EU Laws: There are still many unanswered questions on how we are going to transfer back all existing European legislation back to the national system. A legal expert noted that the legal and business
    implications of the UK leaving the EU are so many that the only way forward now is by making UK trade position. There are not the resources available to make sure the change happens overnight so change will only
    happen gradually.

Download the original PDF here