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The relationship between the United Kingdom and the European Union is crucial to the tourism business across the country. There are many implications that Brexit will have for a variety of UK-based companies, and a lot more are unknown due to the uncertainty surrounding the post-Brexit legislation (Miller 2016). The effect of Brexit on the tourism industry is controversial, as it will provide both opportunities and challenges to businesses operating in this sector. In the present report, I aim to focus on the impact that Brexit will likely have on hotel business overall and its operations. It will show how, despite the overall growth of the tourism industry due to Brexit, hotels may struggle to survive due to severe employee shortages and foreign workers’ taxes. Overall, the report strongly indicates the need for governments to address the issue of foreign workers in certain industry areas that rely heavily on EU employees.
Growth of Tourism
The general state of the tourism industry in the country is crucial to the success of hotel businesses as they are the main providers of stay for visitors. The UK is already experiencing an increase in tourism due to the fall in the pound, which was caused by the results of the Brexit referendum (Cox 2017). For instance, Allen (2017) writes that Official reports showed there were 37.3m visitors to the UK in 2016, which is 3% higher than the previous year and the highest number in the historical records. The industry anticipates further growth as the flight booking numbers at the beginning of 2017 were up by 13% comparing to the previous year (Allen 2017). The government is also focused on supporting the growth in tourism as part of its post-Brexit development plan. For example, the government intends to facilitate cross-country travel, introduce more flexibility to tourism employees training programs, and enhance the B&B regulations to allow for better customer service (Rhodes & Ward 2017)ю
Supporting agriculture, which may be impacted by the change in funding schemes, is also part of the post-Brexit plan (Potton et al. 2017). The success of the agricultural sector is essential as most hotel chains rely on local suppliers for food and drink resources. Despite the number of opportunities discussed above, there are also some potential problems that may affect the hotel industry. For instance, some anticipate challenges to transportation development due to Brexit, such as an increase in flight fares and the halt of the HS2 speed rail line (Butcher 2016). It is also unclear as to what will happen to the agricultural funding after 2020 (Potton et al. 2017). All in all, the tourism industry is likely to grow in general, resulting in an increased demand for hotels. However, the problems in transportation and agriculture may limit the overall positive development and provide operational challenges to hotels, such as looking for new suppliers.
Challenges to Operations
Most of the operations performed in hotel businesses before Brexit were governed by the EU regulations. This facilitated cooperation between the UK hotels and entities from other EU states and made it easier to recruit EU staff and transfer workers across the hotel chains to different countries. Currently, the vast part of employees in the UK service sectors is from EU countries or other parts of the world (O’Carroll 2017). Under the new regulation proposed by the government, the current foreign workers’ regulation will extend to employees from the EU, and the businesses will have to pay a yearly fee of £1000 per employee from overseas (Merrick 2017). This fee will be applied on top of the existing visa charges and the resident labor market test (Merrick 2017).
Moreover, the restrictions on the employee visa schemes may cause many workers to leave the country; given the shortage of British workers in the hospitality jobs market, it will take years to replace EU staff in large chains (O’Carroll 2017). Another difficulty in hotel operations may be created by the change of data protection requirements. The EU businesses adhere to the GDPR standards of data protection; however, after the Brexit, the UK government may decide to change the current scheme (Ward 2016). Differences in data protection requirements between the UK and the EU will put extra pressure on international hotel chains, which will no longer be able to transfer information across the borders. Perhaps, the only opportunity that these changes will offer is increased stability of the workforce, as British people are likely to stay in the country and on the job for longer. Overall, if these difficulties are not addressed in a proper way, they may pose a threat to hotel businesses across the country, making it harder for them to operate in a competitive environment.
All in all, Brexit will create opportunities for the tourism sector to grow, as the visitor demand is likely to increase further. The government schemes provide sufficient support to certain areas of the business that hotels rely on, which will decrease the number of threats associated with Brexit. However, the government will also need to address the issues regarding employees, transportation, and data protection, as the current outlook for the policies regarding these topics is hardly promising.
Allen, K 2017, ‘UK enjoys record tourism as fall in pound boosts visitor numbers’, The Guardian, Web.
Butcher, L 2016, ‘Brexit: how will it affect transport?’, House of Commons Library Briefing Papers, no. CBP7633, pp. 1-47.
Cox, J 2017, ‘Brexit tourism: Pound slump fuels surge in foreign visitor spending in UK over Christmas period’, The Independent, Web.
Merrick, R 2017, ‘UK employers would have to pay a £1,000-a-year fee per EU skilled worker after Brexit under new government plans’, The Independent, Web.
Miller, V 2016, ‘Brexit unknowns’, House of Commons Library Briefing Papers, no. 7761, pp. 1-14.
O’Carroll, L 2017, ‘Replacing EU hospitality workers after Brexit will take 10 years’, The Guardian, Web.
Potton, E, Grimwood, GG, Booth, L, & Sutherland, N 2017, ‘Effect of the UK leaving the EU on the rural economy’, House of Commons Library Debate Pack, no. CDP 2017/0018, pp. 1-36.
Rhodes, C & Ward M 2016, ‘Potential effect of the UK leaving the EU on UK tourism’, House of Commons Library Debate Pack, no. CDP 2016/0169, pp. 1-9.
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Ward, P 2016, ‘Brexit and data protection’, House of Commons Library Briefing Papers, no. 7838, pp. 1-14.