Despite the considerable role the hospitality industry plays in our day-to-day lives, there has been concern expressed over the future of it. It’s facing challenges that are causing the sector to become unsettled – including the UK’s impending withdrawal from the EU in early 2019.
This has led to a question mark regarding whether there’s still hope for hospitality businesses. Here, we outline the main factors that will have an impact on the future of the sector.
Oversaturation of the market
There are too many businesses battling against each other, particularly in the restaurant market. It looks to be a survival of the fittest, resulting in those who are struggling to rival their competitors being forced to shut up shop.
Some see this as a good thing, as a similar situation happened with pubs a few years ago. Those who couldn’t measure up either allowed survivors to gain more market share and opportunities, or diversified. This means that whilst the overload of businesses in the hospitality industry will spell disaster for some, others are welcoming it with open arms.
Those in the sector are finding their costs have increased significantly when it comes to food, workforce and property. In turn, this has driven their profits down and meant that many have chosen to scale back their future plans.
However, food prices are now becoming more stable. Together with struggling brands leaving the industry, there’s less competition for purchasing these goods. This should lead to some businesses’ investments being able to go ahead.
Lack of EU staff
15% of those working in the hospitality industry are from the European Union. This is causing many to feel apprehensive – some believe that, when Britain leaves the EU, there won’t be enough available workers to fill the roles. There are statistics to back this up, with overseas applicant numbers already dropping.
Although this doesn’t look good for the sector, if you can prepare for Brexit, there are ways to combat its effects. This includes making use of agency workers and encouraging young people to see a role in the industry as a career path.
Less EU workers isn’t the only way Brexit is affecting the sector – the ambiguity surrounding it is also having an impact. Currently there isn’t a deal in place between the UK and the EU, leading some to fear there could be a ‘no-deal Brexit’.
This could result in even higher costs, and small and medium-sized businesses will be the ones to feel it most. Whilst this situation is unlikely, there is particular concern over food and drinks imports – something the industry depends heavily on.
Keep on top of your finances with Nabarro Poole
Many have confidence that the sector can still thrive, with 75% of those in the industry feeling positive about the future. But especially with all the uncertainty surrounding Brexit, you should make sure you are up to date with your business’ financial situation. This includes payrolling staff, paying the correct amount of tax, and ensuring you’re making a comfortable profit.
Hospitality is a notoriously busy and fast-paced sector, meaning finding the time to get the numbers right can be difficult. Nabarro Poole can take the sums off your plate. We’ll undertake the duties that will help keep your company afloat – from dealing with your monthly management accounts and assisting with cash flow management to future-proofing with a rolling twelve-month forecast.
With over ten years’ experience in the industry, contact us today to discuss the best way forward for your hospitality venture.