Brexit is creating business opportunities and issues as well as recruitment problems, according to one of the leading UK meetings industry association’s members.
On the day the UK leaves the European Union, The HBAA has released its survey of opinions from a cross-section of its agency and venue members on how Brexit is impacting the events and hospitality industry. Perhaps, unsurprisingly, the survey found the past 12 months had seen mixed the effects of Brexit on the UK hospitality and events industry.
The HBAA reports that Brexit had been largely positive for leading non-residential venue brand etc.venues because the topic itself, rather like GDPR, has boosted the need to meet.
Tiernan Redmond, Sales Manager at etc.venues said: “In the last 12 months, around 150 meetings were held in our venues to discuss and plan for the consequences and opportunities of Brexit. Reviewing the titles of events on our schedule in the coming months, we have many more bookings that are likely to address it.”
The HBAA annual Brexit survey in June 2019 revealed that 78% of the sector believed Brexit had ‘slightly affected’ business, up from 36% in the previous year.
This is in line with what Julie Shorrock, Managing Director of HTS, has seen. She said: “During early 2019 we saw a decline in our clients’ requirements, with many indicating their businesses were experiencing delays in commitments of new projects or contracts.
“Yet, from mid-August 2019, HTS saw a significant uplift in clients’ business, with many saying it was ‘time to just get on with business’, and this growth has continued into 2020.”
The snap UK general election in December caused some negative reverberations across the industry. Andrew Deakin, Director of the Conference Care agency, noted: “Demand for events dropped by around 20%. Reducing costs is high on the agenda for corporate planners and there is a tendency for utilising internal meeting space before going external, as well as a trend towards smaller events that can be easily signed off without board-level approval. With Brexit looming, the trading conditions were challenging. We want an end to the uncertainty.”
Brexit has presented added challenges for venues, too. Steve Jones, MD of Wyboston Lakes Resort, explains: “The combination of Brexit and rising costs is a challenging prospect for our industry. The devaluation of the pound, trade tariffs and delays with supplies due to border disruption could all occur after 31 January so we have to be as ready as possible and quick to respond depending on what happens.”
On prospects for 2020 and beyond, the HBAA says the industry is cautiously optimistic. Nick Scott, MD of arrangeMY, said: “Brexit has been a huge concern over the last three years mainly due to the uncertainty and fear mongering in the national press. As Brexit now appears to be coming to a conclusion, there is a noticeable feel-good factor and positivity.
“Looking ahead, the general consensus is we will experience some short-term pain for long-term gain. At the risk of sounding too optimistic the reduction in red tape, rules and bad policy dictated from Brussels/Strasbourg may be a really good thing for our industry and provide new opportunities.”
Tiernan Redmond was also sounding positive: “The full impact is still unclear but, looking at future business prospects, we believe international markets will continue to offer good opportunities for UK businesses.”
Recruitment is an ongoing challenge for the industry, and one which has been exacerbated by Brexit.
According to the 2019 HBAA annual Brexit survey, 18.7% of the industry had seen a major impact on recruitment as a result of Brexit, with a fifth (19.3%) saying they had changed their recruitment policies.
Wyboston’s Jones said his staff numbers from mainland Europe had dropped from almost 25% of the workforce to less than 15%. “It’s difficult to replace them as the quantity of applicants has reduced. However we have now got schemes in place, such as People 1st, which we believe will help us with recruitment and retaining staff.”
Deakin added: “Recruitment is an ongoing challenge in our industry. There is a skills shortage and, as an industry, we do not do enough to attract top quality graduates.”
One aspect of the industry that will not change immediately is the Tour Operators Margin Scheme (TOMS).
HBAA Chair Lex Butler (pictured above) said: “We’ve been advised that during the 11-month transition period until 31 January 2020, EU VAT rules will continue to apply. Therefore, the current TOMS will continue during this period. We don’t know what will happen at the end of the transition. One distinct possibility, as far as TOMS is concerned, is the adoption from the start of 2021 of the new TOMS Order prepared for a no-deal Brexit. This would introduce a new UK version of the scheme mirroring the current UK implementation of the EU scheme but with one large difference, namely that the margin on travel in the EU27 would be zero rated.”
Butler concluded “After more than three years of uncertainty, we now hope that the greater clarity will help everyone to move forward more positively. While recruitment will remain an issue, the recent announcement that the £30,000 salary threshold for migrants might be reduced is encouraging.”
Meanwhile, Britain’s national tourism agency, VisitBritain, is sending a message of reassurance, underlining that travel for event attendees travelling from the EU to the UK in 2020 does not change.
Flights, ferries, coaches and trains will continue to operate as usual and the documents that EU delegates need to travel to the UK for business events will not change until at least 2021, the agency explained.
EU citizens will still be able to travel with ID cards, use European Health Insurance Cards (EHICs) and continue to travel to the UK for all business events without needing a visa.
VisitBritain Head of Business Events Kerrin MacPhie said: “Europe has been and always will be an incredibly important market for the UK with tourism businesses welcoming about 27m European visits to our shores every year.
“We are reassuring delegates from the EU that travel to the UK will not change in 2020 and they can continue to visit with confidence.”