It has been just over three months since the result of the EU referendum came in. However, despite the time that has passed, it’s still difficult to see how things are going to change. Whether it will affect London’s hotel industry is one of the issues that remains murky.
It’s not yet clear when exactly the UK will be out of the EU. All we know for sure is that negotiations could take up to two years to complete from handing in an “official notice” by invoking Article 50. Although the country hasn’t officially left yet, people have been noting the effect of the referendum’s outcome on London’s tourism and hotel industry.
Shortly after the vote, the value of the pound experienced a significant drop. It was this that led to a short-term boom in hotel occupancy in the capital.
Many hotels, as well as airlines and attractions, reported higher sales in the aftermath of the referendum. According to the Tourism Alliance, there were 18 per cent more foreign visitors and 11 per cent more British in London this July, compared to July 2015.
However, it doesn’t appear that this short boom has had a lasting effect. There are worries that in the long-term, Brexit could have a negative impact. The Hotel Bulletin from HVS, AlixPartners, and AM:PM revealed the sixth consecutive quarter of year-on-year decline in London hotel occupancy. This can be attributed to a number of factors, including global terrorism concerns, as well as the US presidential election later this year.
However, some have predicated that Brexit is going to have a further negative impact on tourism and hotel occupancy.
According to PricewaterhouseCoopers, businesses will be cutting their travel budgets, meaning fewer business travellers. There will also be around 7,200 new hotel rooms in London in 2017, which means more rooms to be filled. Not to mention the impact on staffing and recruitment – with many of London’s most talented hotel staff being EU nationals.
Others though are less worried. For example, Spanish hotel group Room Mate are currently scoping out UK locations, targeting central London.
In reality, it’s hard for anyone to predict the real impact of Brexit on London’s hotel industry. Although we can see how the vote is having an effect, it will be a long while before the UK is officially out of the EU.