The impacts of The UK’s withdrawal from The European Union on the Hotel Industry

| January 4, 2017

Introduction

The hotel and accommodation industry in the UK is a major business for both multinational and SMEs in the country due to the attractiveness of UK as a tourist destination on a global scale. The free movement of persons across the euro zone has increased the frequency of travels between the EU member states, which has bolstered the tourism sectors of the EU economies.This situation is more apparent in the UK where most of its foreign tourists emerge from the EU member states due to ease of movement of persons within the EU (Rolfe & Hudson-Sharp, 2016). Consequently, the hotel industry in the UK is largely depended on leisure and business travellers from the UK. The decision by Britain to withdraw from the European Union is a disaster for the tourism industry and specifically businesses involved in providing tourists with accommodation services. There is a general serious concern for the UK’s hotel industry as a result of the anticipated negative effects of Brexit on the travel industry in the UK.

Constraints of Free Movement

There is a strong tourism and travel flows between the EU and the UK. The destination for the majority of UK tourists is the EU, which is, in turn, the main source of international tourists entering the UK (Rolfe & Hudson-Sharp, 2016). Travel and tourism trade between the EU and the UK has been expedited by the free movement of products and services, people and investment across the Euro Zone. This free movement and the flow of travel and trade could be significantly affected by the implementation of the Brexit. The EU has various regulations that are designed for the benefit of business travellers and holidaymakers. As much as most of these policies may not be altered immediately, UK’s withdrawal from the EU has significant future implications. Free movement of people between the UK and other EU member states is supported by various regulations such as the financial protection regulations for bundle holidays, flight delays compensations, access health cover while traveling within the EU, and controls on mobile phone charges. In this respect, Brexit will expose customers within the EU to higher prices and fares while considering UK as a travel destination, which might limit the competitiveness of the UK as a tourist destination for travellers from the EU (Milas et al., 2016). An immediate concern for the travellers’ hotels in the UK is the effect of uncertainty period that follows the current Brexit negotiations. Further, the period immediately after exit from the EU will be damaging to the Hotel industry in the UK. Specifically, an exit will culminate in elevated travel costs and decreased travels between the UK and the EU. This would also imply the collapse of the European Health Insurance Card, which is an attractive package for travellers within the EU. Consequently, for the hotel industry in the UK, the negative effects of Brexit far outweigh the perceived benefits.

The Cost-effectiveness of Human Capital

The hotel industry in the UK is a net employer of a significant number of immigrants from the EU. A consideration of changes that will affect the ability of the sector to recruit foreign nationals could affect many businesses in the hospitality sector with respect to filling various roles in that there is a general skill shortage in the UK’s labour market (D’Angelo & Kofman, 2016). In this respect, the hospitality sector in the UK could struggle to fully recover from the withdrawal of UK from the EU in that the hotel industry in the country is dependent on the EU as a source of labour. Specifically, the freedom of movement within the EU is key to the sustainability of the hotel industry in the UK and therefore Brexit may affect the financial viability of various elements of the Hotel industry in the UK. For instance, hotels in the UK are able to provide quality services at a lower cost when compared to its major competitors, Australia and the United States as a result of its membership to the EU. Furthermore, the large customer base in the EU enables UK Hotels to operate at capacity which means that they can offer better prices and guarantee more visits and hence competitiveness of the UK tourism sector (Milas et al., 2016). The implementation of the Brexit implies that EU residents will not be able to freely work as employees within the UK’s hotel industry. This will force the hotels to outsource some of its services to local firms, losing quality control and increasing the cost of hotel services by over 20 percent. Therefore, the membership of Britain within the EU is central to the existence of Hotels in the UK as cost effective quality service providers on a global scale.

Conclusion

As Brexit becomes a reality in the hotel industry in the UK, it is apparent that exiting from the EU may affect the sustainability of hotels from two points of view. Firstly, the collapse of free movement deal between the UK and other EU member states imply a significant decline of foreign travellers in the UK due to cost and travel bureaucracy issues. Secondly, the possibility of a significant number of employees in the hotels industry facing deportation due to withdrawal from the EU imply increased operational costs for hotels in the UK and ultimately a decline in their competitiveness on a global scale. Therefore, as plans for Brexit are being laid down, it is important to consider the possibility of adopting policies that will ensure the hotel industry in the UK survives the Brexit process.

Reflective Summary

This reflection is founded on Gibbs (1988) Reflection Cycle. The decision to utilise this approach was rooted in the fact that it inspires a vibrant account of the situation, examination of feelings, experience evaluation that enhances the ability of an individual to make sense of all the experiences and ultimately be able to apply the acquired knowledge in related situations (Gibbs, 1988). While the principle objective of this course was to examine learning through developing academic skills, the approach taken in this course to achieve this objective merits a reflection. The course in both lectures and tutorial sessions involved the establishment and development of working study groups. From the study groups, I was exposed to numerous perspectives on what a study group is and numerous variations of study groups in different contexts and different purposes. In fact, as much as the same charge with respect to study assessment was provided, each state resulted in a unique study group. Despite these disparities, I gained fascinating insights in the study group practice, and I currently consider it to be among the most valuable approach to exploring novel ideas and contributing practically to my professional development. In addition, I noted that since the study group agenda is driven by the group members, the experience was highly personal and purposeful.

This model has been influential in my ability to develop excellent communication skills. Specifically, this module made me aware of the imperativeness of communication skills with respect to communicating with instructors and peers, expressing thoughts and reflection, depicting critical thinking during group discussions, and being culturally sensitive while talking to peers. These are competencies that will build on my communication skills to assist me in my academic undertakings. Further, this module explores ways of improving written forms of communication in that it is essential for a student to be able to express him/herself through writing. This will be important to me when writing research papers, analytical case studies, speeches, and essays.

References

D’Angelo, A., & Kofman, E. (2016). UK: Large-Scale European Migration and the Challenge to EU Free Movement. In South-North Migration of EU Citizens in Times of Crisis (pp. 175-192). Springer International Publishing.

Gibbs, G. (1988). The reflective cycle. Kitchen S (1999) An appraisal of methods of reflection and clinical supervision. Br J Theatre Nurs9(7), 313-7.

Milas, C., Worrall, T., & Zymek, R. (2016). Watch Out for Winners and Losers: Odd-‐Implied Brexit Sentiment and FTSE Returns. Financial Times.

Rolfe, H., & Hudson-Sharp, N. (2016). The impact of free movement on the labour market: case studies of hospitality, food processing and construction. Retrieved from http://www.academia.edu/download/45123775/Free_movement_final_report.pdf

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Category: Business & Management, Economics, Essay & Dissertation Samples