Hotels & Hospitality: uncertainty or opportunity

Ask the Expert

By Fiona Hotston Moore – Forensic Accounting partner, Ensors Chartered Accountants

As we all breathe a sigh of relief as the madness of Christmas passes and we welcome in the New Year with all the hope and expectation that comes with a new beginning, we cannot help but feel a slight anxiety as the economic uncertainty that haunted 2018 follows us into 2019. 

With Brexit just three months away, a backdrop of increasing inflation and an unexpected hike in the budget deficit you could be forgiven for thinking things look a bit grim for 2019. 

The hospitality industry, in particular, has had it tough.  2018 saw a string of high street failures, Brexit threatens wage costs and the competition just took an unprecedented leap into the unknown with the sudden growth of home letting operations.

However, with every challenge there is an opportunity and 2019 could be the year your business becomes leaner, meaner and meets the challenges head on!

So, what are the key challenges and opportunities facing our local hospitality sector?

Selling the story and not just a bed: Customers are looking for a unique experience and not just a bed to sleep on. Visitors to East Anglia want to experience local sights and attractions and the canny hotelier will ensure their hotel is part of the local cultural experience.

Resilience: The leadership and management team, at all levels, must demonstrate mental resilience and maintain a positive outlook.  This will transcend naturally to all staff and help to keep them motivated when times get tough ensuring that the service levels are maintained and don’t slip with spirits.

Increasing competition: Home sharing has entered the sector with Airbnb having a significant impact on the hotel and holiday lettings market and even the larger hotel chains looking to join the home sharing market.  Independent hotels will need to compete in terms of both the guest experience and price.

A continuing appetite by customers for slick and innovative technology: Guests are looking for time effective solutions from virtual tours, booking online, through to check-ins and keyless room entry. Social media is a key tool in attracting guests, but a poor review can have disastrous consequences. Businesses must actively manage their online presence.

Financial pressures: Over the last year the industry has felt the impact of food and beverage price inflations as well as increasing wage costs. Unfortunately, it is anticipated Brexit will drive up the costs of food and labour significantly. The planned changes to immigration will mean that EU migrants no longer receive preferential treatment. Skilled migrants are expected to be preferred over the less skilled labour which is key to the hospitality industry. The resultant shortage of labour is likely to fuel the increase in wage costs.

The weather: Unfortunately, no business can influence the British weather. However, the exceptional summer in 2018 will have boosted the UK hotel and leisure industry both this year and is likely to boost advance bookings for 2019.

Fiona Hotston Moore is a partner at Ensors Chartered Accountants. E: Fiona.hotstonmoore@ensors.co.uk or visit ensors.co.uk Twitter @hotstonmoore

Share This

SIGN UP

WHEN RELEASED WE WILL SEND YOU THE latest digital version.