New Year Predictions for the Hospitality Industry
Although we don’t have a crystal ball to help us see what the year ahead has install for us, we like to think that our ties within the hospitality industry gives us some kind of insight. Here is what we think you can expect.
- A weak pound balanced by a strong dollar will bring an influx of US tourists spurred by a desire to explore new horizons in the face of an unpopular Republican presidency.
- Many more Britons will enjoy a “staycation” as a result of a weaker pound.
- Economic growth – 2.1% increase in GDP forecast for 2017 faster than any other G7 nation – will boost morale and encourage the sector to invest in development.
- The anticipated 5% rise in unemployment will create a talent pool for those willing to retrain for a career in hospitality.
- The London restaurant scene will remain vibrant with even more options for the choosy diner.
- Quality brands such as The Ivy Café and Grill will bring more high-end food to the high street, attracting more people to eat out again.
- Brexit’s focus on all things British will prompt a renaissance in British food and ingredients. Restaurants and pubs will pioneer home produced, regional ingredients and more seasonality.
- More restaurants will innovate for emerging food trends and menu diversity, in particular healthy eating, gourmet menus adapted to food intolerances and lifestyle preferences such as fine dining deliveries at home.
- Restaurant closures will increase and the ratio of the number of restaurant openings to closures (currently 2.6:1) will edge closer to 2:1.
- High street independents will struggle in the face of higher rents and rates, and will be targeted ever more strongly by branded chains.
- Many tourists will avoid the UK on principle because of Brexit’s anti-immigration links.
- A weaker Euro-zone will attract more tourists away from the UK.
- A soft Brexit will allow some access to free movement and freedom of trade though this is unlikely to become clear until the end of the year leading to a year of political brinkmanship in Europe.
- A rise in unemployment will decrease domestic purchasing power, which will hit budgets for going out for meals.
- Wine prices will continue to rise and in the UK and could even double or triple as restaurants try to cope with continuing exchange rate fluctuations.
- Food inflation predicted by food service companies at between 2% and 4% will drive up the cost of a meal out by at least 10%.
The UK has so far successfully weathered the Brexit blast and shown continued growth. We predict that this is likely to continue into 2017. There are likely to be many surprises as Britain enters the New Year, not only in terms of Brexit but also as the global economy adjusts with both a new direction in leadership from the US and other European countries anticipating potential fundamental changes in leadership.
From a recruitment perspective, we anticipate that the market will remain positive but difficult, with a shortage of talent in many key roles such as head chef jobs. While this would become much harder if there is to be a hard Brexit our prediction is that the government will steer a more moderate course, and that we will continue to see a strong influx of employees from the EU.
While 2017 will be governed by uncertainty, and there are many economic factors working against the hospitality sector, there are also several positive factors which will enable the industry overall to thrive.