Out-Law Analysis | 18 Jun 2019 | 8:30 am | 3 min. read
Bold, innovative action will help the UK's hospitality and tourism sector overcome the threat to business models presented by the ongoing Brexit uncertainty.
The tourism and hospitality sectors could be among the worst-hit by Brexit, with a double impact from a potential reduction in visitors to the UK as well as a variety of business-related challenges. As a result, the industry is understandably wary about the political, social and economic implications of the choice of a new Conservative party leader and prime minister and how they might handle Brexit.
A key issue posed by Brexit to the hospitality and tourism industry is staff retention and recruitment. Operators have already found it difficult to retain existing staff and recruit new team members from elsewhere in the EU giving the ongoing Brexit uncertainty and particularly with the potential for a no-deal Brexit.
Legislative changes which came into force in 2017 introduced immigration checks on businesses applying for alcohol, late night refreshment and late hours catering licences.
With Brexit adding further complexity to the immigration landscape, the additional administrative burdens on already overstretched authorities could impact adversely on application processing times. This could dis-incentivise expansion by some businesses, particularly in areas known to have long delays in dealing with applications.
Businesses need to think outside the box in terms of experiences they can provide their audience...
Recently the Scottish government scrapped plans to first reduce and then abolish air departure taxes. This apparent U-turn on airport duty was seen by many as a massive blow to not just the industry but the Scottish economy as a whole.
Another big industry complaint of recent times not only in Scotland, but in England & Wales as well has related to business rates, long considered by the trade as unfit for purpose, although the Scottish government recently laid a bill before the Scottish parliament to make business rates revaluations more frequent in a move that was cautiously welcomed by hospitality and tourism businesses. This may well provide those affected with more breathing room long-term.
The Northern Ireland Department of Finance is also to review business rates with a view to updating a system that has faced much criticism from industry groups including Retail NI, the NI Retail Consortium and Hospitality NI.
The department announced it would carry out a “full and comprehensive” review of the rates paid by businesses, including pubs and shops, although it warned that in the ongoing absence of an executive at Stormont, the changes that could actually be introduced would be limited.
Also in Northern Ireland, the Department for Communities (DfC) has announced the outcome of its recent consultation on sale and supply of alcoholic drinks at 'special events' in Northern Ireland. The DfC consulted on a proposal which would give it the power to designate an event taking place in Northern Ireland as a ‘special event’, which would enable authorities to amend permitted opening hours and to authorise off-sales.
The DfC considered that the move would benefit the hospitality and tourism sectors in Northern Ireland and make the country a more attractive proposition for major sporting and cultural events – such as the upcoming 148th British Open golf championships.
To counteract the threat from Brexit, tourism and hospitality businesses need to be bold and innovative. The UK tourism sector is no stranger to instability and Brexit is just the latest disruptor on the block.
In times of increased legislation, local authority cuts and an increasingly vocal health lobby, the message that the “UK is open for business” is more critical than ever.
Businesses need to think outside the box in terms of experiences they can provide their audience, while licensing authorities, courts and legislators need to be flexible and pragmatic in their support of local businesses.
As the trade has shown in the past, the existence of a disruptor does not mean you throw in the towel. It means you up your game.
Businesses need to ensure that they retain and motivate the best staff. In this climate that means preparing for Brexit, even a ‘no deal’ scenario, and includes mapping risk exposure and identifying opportunities.
Supporting staff, either internally through an advice or helpline or outsourcing, will be essential as will protecting a company’s brand, particularly if it plans to look at markets or supply chains other than Europe.
Key to this is to consider bringing in external expertise to help facilitate and inform strategic planning and risk mitigation. It is also important that the industry shares ideas and concerns through organisations such as UK Hospitality and the Scottish Tourism Alliance in Scotland.
James Griffiths is a licensing expert at Pinsent Masons. Pinsent Masons’ licensing team serves all three UK jurisdictions and is pleased to support the Institute of Licensing’s National Licensing Week (June 17-21 2019): ‘Raising awareness of licensing and its impact on everyday lives’.
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