BREXIT: LEMMINGS, CLIFFS, ETC.

David Collins, columnist and Co-Founder & Chief Operating Officer at Great National Hotels and Resorts Group discusses the unmitigated disaster that BREXIT is, its repercussions for the UK travel industry and measures for hotels to counter this impact.

What is currently happening in the UK under the current May government reminds me of what happened 10 years ago when the Irish government – led by Bertie Ahern and laterally Brian Cowen and Co. – literally drove Ireland off a cliff into an economic and social abyss.

I had hoped that I wouldn’t see it happen again in my life-time but there you have it: history has a habit of repeating itself. Even recent history. Social chaos, economic uncertainty, rising inflation, falling wages, declining consumer demand, stalled investment .. all repercussions of when an ‘elite few’ act in their own self-interest.

This is what happened 10 years ago in Ireland and this is what is happening in Britain right now. The UK government is like a child trying to push a round peg into a square hole battling against the odds to force through the results of a deeply flawed and ill thought-out BREXIT referendum. A referendum which was pitched as means of addressing concerns about accelerating immigration, over-arching EU bureaucracy and nett UK budget contributions but which in truth was about David Cameron getting one over on the UKIP crowd – since defunct by the way – and protecting the Conservatives as the ‘go to’ party for SW1.

As regards the impact of all this on business and more specifically 2017 UK travel and tourism spend, it will come as no surprise that there has been, to put it mildly, a ‘slow-down’ in demand. More pointedly, the industry is facing an unmitigated disaster of a year which is likely to continue well into 2018 unless there is a seismic change within the political landscape.

By this I refer to another general election and a Labour win. The only ‘positive’ here is that much in the same way Fianna Fail were replaced as the ‘ruling party’ following Ireland’s own economic meltdown – the other crowd weren’t much better by the way – the fact is that the international markets reacted positively as it was a case of ‘anyone but Fianna Fail’, and this will likely to be the same as and when Corbyn is elected. Which is a real likelihood although at the same time a perishing thought for some. The only upside is that you would hope that given the weight of support he personally has amongst younger voters that this would create a pretext for standing BREXIT down. Again this is a real possibility.

Getting back to the travel business however, given that UK consumer confidence is down – not helped for example by inflation outpacing wage growth – it’s perhaps no surprise that people are simply not traveling in the same numbers as previous years: in Q1 2017 alone, holidaymakers traveling from Britain to Ireland were down a massive 15% on 2016 according the Irish Central Statistics Office. This likely to be as high as 20% in Q2.

The challenge therefore for hotels and the like, is firstly to understand that there is little or nothing we can do to influence the macro-economic landscape but instead to focus on factors we can control; more specifically for example:

– to ensure that the product and service you provide your customers with is the best that it can be;
– to develop an agile pricing and distribution strategy which enables you to out-flank your competitive set;
– to maintain a superior level of brand visibility, both within your local markets as well as on-line; and,
– to drive your staff and colleagues to likewise assume responsibility for business development, acquisition and retention.

On this last point, it is a bit of an old chestnut but the reality is that the hotels industry is a ‘people business’. Technology has an ever-increasing role to play however do not under-estimate the impact your front-line and back office folks have on not just the hospitality experience for your guests but also the key drivers in your business such as reducing costs, converting sales and optimizing yield.

The message is simple: focus on what you can control and be prepared to change and adapt.

Ms. May and Co. would be well-advised to do likewise.

About David Collins: David draws his expertise from an intimate knowledge of the Irish and UK hotel industry with a proven track record in brand development, digital distribution and business acceleration. David’s work is well known in both Ireland and the U.K. where he has been instrumental in building some of the largest hotel brands, most recently Great National Hotels and Resorts, currently one of the fastest growing, independent hospitality groups in Europe.
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