Brexit: Threat or Opportunity?

Belinda Booker asks key figures what Brexit means for the outdoor hospitality industry.

It might be ‘business as usual’ for the time being, but as Brexit negotiations begin in earnest what is the likely impact on the outdoor hospitality industry?

Major concerns for hospitality businesses include the potential loss of affordable Eastern European labour and the possibility of another recession. A drop in domestic consumer confidence could mean greater reluctance to spend on attending events and weekends away, and significantly reduced budgets for those getting married. On the other hand, a weaker pound could lead to an increase in inbound tourism.

To gain a better understanding of the effects of Brexit on venue operators, accommodation providers and outdoor event organisers, we asked seven industry leaders for their opinions.

The Function Venue Sector

lester-gethingsLester Gethings, Co Director, National Association of Wedding Professionals

“The decision by Britain to leave the European Union will undoubtedly have an effect on the wedding industry, as well as the entire UK economy. However, until Article 50 is triggered, and at least two years of negotiations have taken place, no one can gauge much from the short, medium or even the long term as none of us know what will happen.

“While many businesses are feeling the kneejerk reactions from the result, and cannot help but focus on the negatives, there are some potential benefits too.

“The dramatic fall in the value of the pound can, perhaps, be seen as an immediate positive, because it makes our economy more competitive than it has been in recent years. As weddings are all about selling goods and services, this fall will make our industry more attractive to continental and overseas clients. For couples wanting a destination wedding, the UK could become the new ‘go to’ destination. Potentially, wedding venues in particular, could benefit from an increased customer base.

“Without being tied to a single European market, the UK will be free to explore new trade agreements and this could certainly benefit the hospitality side of the wedding industry if cheaper foodstuffs become available.

“Weddings are such positive and happy occasions that small business owners should embrace that positivity, and forge a new entrepreneurial spirit.”

peter-ducker-fih-institute-of-hospitality-1-2-1Peter Ducker, CEO, Institute of Hospitality

“There are opportunities to be had for venues that are agile enough to capitalise on a potential uplift in demand for UK based weddings. Outbound flights may increase in cost and the value of sterling will remain challenged globally in the short and medium term. More couples may therefore opt to marry and honeymoon in the UK in order to keep their costs down.

“Venues need to consider how they will manage their staffing in order to cater for the opportunities this may bring as well as be creative in their use of space in order to accommodate more weddings.”

ciara-crossanCiara Crossan, CEO, Wedding Dates and Institute of Hospitality Business Partner

“Of course the threat of the country going back into recession is a real worry and this will have an impact on wedding spend. Though people generally still tend to get married in periods of recession, their budgets are much tighter. This will be a worry for venues that are just starting to see people loosen the purse strings again after the last recession, particularly in areas outside of London.

“There is a definite opportunity to capitalise on the weak sterling as fewer people are likely to travel abroad now to get married and may choose to stay in the UK for their big day instead.

“Venue operators should promote their venue to UK couples who may be living abroad to entice them to come home to get married and save some money. Ireland is the obvious choice, but British people live all over Europe or even further afield in Australia, New Zealand, Canada or America. Facebook targeting makes it relatively straightforward to target groups like that to tempt them to consider returning to the UK for their big day. Venues could facilitate Skype show rounds for those couples who are abroad.”

The Accommodation Sector

LONDON - UK - 17-SEPT-2013: Staff Photgraphs of the Visit Britain offices. Photograph by Ian JonesSally Balcombe, CEO, VisitBritain

“We’re responding to the EU referendum result in three ways. The first is we need to get out the message that we are very much open for business. There is no change to any travel arrangements to Britain and we very much want people to come.

“The second thing we’re doing is thinking about how we make people feel welcome. Some of the sentiment out there has some less positive aspects and we need to counter that. We need a clear, positive message that everybody is welcome from all parts of the world and particularly to our European market that represent two-thirds of visitors to the UK.

“The third thing is around value. With the exchange rates as they are we now represent very good value for money, particularly from markets like the US where the dollar is now strong against sterling. These are our three core messages.

“We’re getting geared up to do a lot of activity in the US to respond to that dollar exchange rate and go into market with some tactical campaigns.

“We understand that the flip side of currency is it’s more expensive for UK citizens to travel abroad. Therefore, there’s a real opportunity to say to people that this is the year to have a ‘staycation’ in the UK.”

The Outdoor Events Sector

steve-heapSteve Heap, General Secretary, Association of Festival Organisers

“In the events industry there have been many changes, especially in recent years. There have been variations, new laws and guidance; some of which we have welcomed and others questioned. But in the main the safety of our workers and our customers is paramount and as technology moves us onwards we have a duty to keep up and be safe.

“Economically I have been employed by several events funded from European cash in the form of regional development funds, direct and indirect grants from Europe. So if what the Brexit team tell us is true (and I doubt it), that the £350m per week saved will go to the NHS, then where do events, festivals and tourism get their financial support?

“Our new PM and Cabinet will no doubt pick up where the previous left off, with cuts in local authorities, Arts Council, social cohesion and health support. They will probably put billions into defence and spend a small fortune on ‘getting us a good Brexit deal’.

“Our events industry will be back to ‘carnes’, ‘border searches’, ‘insurance premium hikes’ and a reluctance by our old EU colleagues to accept what we want to take on tours of Europe. We must invest and organise to maintain our top table credibility as an island that is worth visiting. We have the best festivals, the greatest heritage and years of professional experience in the conference and exhibition world. Our inbound tourism should remain at the top.

“However, to maintain this I expect once again the festival and event organisers will knuckle down and do their best to keep the show up and running. They will deliver economic value, social cohesion and quality of life through a shared culture in UK communities. European visitors will, as always, be very welcome.”

richardlimb-1Richard Limb, President, National Outdoor Events Association

“We think Brexit has the potential to affect us all a lot, but it all depends on what happens with the economy, the value of the pound and its effect on international trade and interest rates and how that impacts on us domestically. Will it or won’t it lead us back into recession?

“If anyone from Europe wants to go to Glastonbury or wherever, they will still do so. We cannot see travel prices going up as the pressure that airlines would put on the EU if they lost business would be immense.

“If equipment is coming from Europe they will still want the business, but more importantly it will open the door for UK companies to gain more business here. Those that take their equipment over to Europe will continue to do so as they are required to at the moment. We live in a supply and demand world; if the demand is there, you’d better believe there will be a supply.

“Our event industry is important to the UK economy. Firms such as Festival Republic and Live Nation trade throughout Europe with festivals in Spain, Ireland, Norway and Germany that will generate millions for the local economy, so we cannot see the governments in those countries stopping them or taxing them more highly.

“The free movement of labour could be an issue, but in the short term Britain may become more popular as a tourist destination as the exchange rate changes.

“We are fairly certain that Scotland will be voting again on it remaining as part of the UK. This time we think it will go. Northern Ireland might do the same and if it goes, Wales may go as well.

“It may be good or bad but the potential effect could be massive. It is too early to know the impact, but we cannot be confident that it won’t affect us much.”

paul-reedPaul Reed, General Manager, Association of Independent Festivals

“Following the referendum decision to leave the European Union, AIF will continue to represent the best interests of the UK independent festival sector. We’ll be working hard in the coming months with our members and the wider industry to fully understand the ramifications and ensure that relationships throughout the festival community are not diminished.

“We’ll maintain positive relationships and ensure that the sector has a strong collective voice, also maintaining our connections with organistaions including UK Music, YouRope, the Association of Festival Organisers, the International Festival Forum and the Creative Industries Federation.

“The festival market has developed as a truly European market aimed at Europe-wide audiences. This is a great strength and won’t substantively change.

“The key questions are: Will it now become more complicated to work across borders? What will the impact be on touring musicians, especially emerging artists, in terms of visas and other issues? We could also potentially see a reduction in ‘music tourism’, which generated £3.7bn for the UK economy in 2015, with a year-on-year increase of 16% in overseas tourists attending music events. There are more questions than answers as we survey the initial fall out.

“It is business as usual for now and will be for the next couple of years at least. There is naturally some concern about the economic uncertainty that lies ahead and the impact this may have on business and we are currently waiting for the dust to settle and for the short term political and economic consequences to play out. We have a strong relationship with the Department of Culture, Media and Sport (DMCS) and this will be a topic very much on the agenda in our conversations with them.”

Facing the future with optimism
While these industry experts agree there will undoubtedly be challenges ahead as Britain’s new relationship with the EU is hammered out, they also see opportunity.

Economic uncertainty is countered by increased competitiveness that could boost inbound tourism and event attendance from overseas. Meanwhile, domestic travel and local weddings start to look like a better deal for Brits.

Outdoor hospitality professionals who are proactive and start responding to this opportunity now can safeguard their businesses for the future.

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