What does the UK hospitality industry look like post-Brexit?

Last year the British government held a referendum on the United Kingdom’s potential withdrawal from the European Union. A majority voted for the movement and we recently learned the split is set to happen by March 2019.

The issue immediately sparked concern and uncertainty among many in the UK, especially within the hospitality and tourism industry, which is the fourth largest in Britain.

Although the terms of the withdrawal have not yet been negotiated, experts in hospitality are predicting the emergence of one issue in particular.

Why does the UK hospitality industry need the EU?

The greatest cause of worry for hoteliers revolves around the amount of staff the hospitality industry in the UK draws from European migrants.

In the current climate workers are free to enter the UK without a work permit or visa, and employers only have to undertake a ‘Legal Right to Work’ check before people start their job.

On this basis UK hotel, restaurant, leisure and entertainment businesses employ over 400,000 migrant workers. Just the average five-star hotel in London is run by staff representing as many as 50 nationalities.

One of the arguments for separating from the EU was that it was preventing Britons from obtaining jobs, but new data debunks this train of thought.

Will Brexit result in a big shortfall of hospitality staff?

With a devalued pound and the potential for the government to introduce a new work scheme that would require employers to request permission from a central government authority to employ foreign national workers, migration from the EU could slow significantly.

While this was a key voting driver, the hospitality industry could suffer from a big staff shortage. The British Hospitality Association says the hospitality sector faces a recruitment crisis, with upwards of 60,000 workers per year needed, in addition to the ongoing recruitment of 200,000 workers required to replace churn and to power growth. It says that the labour shortfall 10 years after Brexit would be one million if EU migration fell to zero from 2019.

Are the effects of the Brexit vote already being felt?

New research from the UK’s Recruitment and Employment Confederation says there are already fewer people available to fill new vacancies in the industry and hotel professionals on the ground are confirming it.

Keith Edwards, chief people & development officer at Soho House, believes the uncertainty is already making a difference:

“In the weeks and months since the Brexit referendum, we have noticed it becoming harder and more expensive to recruit and we expect that trend to continue. The drop in the value of sterling means that many of those from abroad who are working here have less money to send home, and the influx of those moving to the UK to seek work is slowing.”

Because public concern around immigration levels was one of the motivating factors for the Brexit vote, it may be difficult for the government to negotiate a new relationship with the EU to permit the free movement of workers.

This means there may have to be a conversation about EU nationals staying in their current roles and finding ways to reduce staff churn in the hospitality industry.

Otherwise, major issues could be afoot.