Wetherspoons’ boss, Tim Martin, is celebrating. After donating £200,000 to the Brexit campaign, distributing hundreds of thousands of Brexit beer mats across his chain of pubs, and even creating a new ‘Brexit’ ale, he has good reason to feel chipper now that the nation has made its biggest democratic decision in a generation, to leave the EU.
However, not everyone in the pub trade and hospitality sector shares his unbridled optimism. After all, the only certainty is that there will be a prolonged period of uncertainty. We are charting new waters with (currently) no captain and no horizon in sight. Not everyone views this journey as an exciting adventure to a promised land; there are some very real concerns for the industry.
Brexit threatens investment in the hospitality sector
Profitability and investment in the sector are under threat. At the time of writing, the pound has dropped to its lowest value for over 30 years. Assuming this is something more far-reaching than just a blip, the knock on effect for us all is significant. Prices for fuel, food and other daily essentials will go up; the amount of money we have left in our pockets will go down. Not only will pubs, restaurants and hotels suffer increased costs, but their regular, domestic customers will have less spare cash (and possibly less inclination) to spend on leisure.
Will Brexit call time on temporary European labour?
And then there’s staff to consider, too. Pubs, hotels and restaurants rely heavily on cheap, often temporary, European labour. Free movement has been hugely beneficial to the industry. Brexit may well put an end to that, forcing publicans and restaurant and hotel owners to invest more money in incentivising and paying domestic staff.
Can pub tenants expect lower rents following Brexit?
Of course, it’s possible that Brexit could result in some positives for the hospitality industry, too. The low value of the pound should make Britain an even more popular destination for tourists – and, hopefully, they will be more flash with their cash. In addition, it seems probable that the construction and property industries will take a hit. Bad news for investors but, finally, a possible glimmer of hope for desperate tenants, including pub tenants, as the anticipated knock-on effect is a reduction in rental inflation. Longer term, who knows.
Brexit, a waiting game for the hospitality industry
For now, all any of us can do is to watch and wait. But if you’re a publican, restaurant owner or hotel owner, you would do well to maintain an extra vigilant eye on your cash flow and finances over the coming weeks, months and years. And if you have good, reliable European staff, now is probably a good time to reassure them and show them you care.
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