Hospitality Bosses Concerned by Instability

The report from the British Hospitality Association (BHA) in partnership with global search firm Heidrick & Struggles, captures the views of 41 hospitality and tourism chiefs* at Britain’s leading hospitality companies, who together employ some 850,000 people with £30 billion in sales.

Key findings show:

• Confidence in the economy has decreased – recovery seen as fragile.
• Industry feels politicians out of touch with one of UK’s most significant engines of growth.
• Three quarters (74%) of bosses say they will vote to remain in the EU.

Commenting on the findings, BHA CEO Ufi Ibrahim said: “This second Leaders Report from the BHA and Heidrick & Struggles, provides a critical snapshot of opinions on current key issues from senior figures in one of the UK’s most important sectors.

“BHA members represent the fourth biggest industry in the UK, employing more than 10% of the country’s workforce. Unlike most sectors, our growth is also directly reflected in employment growth – especially youth employment – and provides increasing opportunities for a broad range of careers.

“The business leaders interviewed in this report represent a very important voice. They feel that the economic recovery is fragile and consumer confidence easily knocked. This, together with the uncertainty and lack of clarity in the referendum debate, is already having a detrimental effect on the industry.

“They also share a feeling of frustration that government is still out of touch and is failing the industry, due to an apparent lack of interest when it comes to policy development for tourism and hospitality.

“Given the size and importance of the hospitality and tourism industry, the significance of these views cannot be ignored,” Ufi Ibrahim added.

“Brexit is just one example of the many uncertainties facing business leaders at the moment,” said Ben Twynam, who leads Heidrick & Struggles’ Travel, Leisure and Hospitality Practice in the UK.

“As the business leaders we spoke with note, it is vital that the hospitality industry is able to adapt quickly to changing circumstances. At the same time, it is increasingly difficult to foresee where these game-changers are going to come from. As such, widening the talent pool to attract leaders with the ability to create agile organisations and deal with unpredictability and change has never been more important.”

ECONOMY: Confidence in the economy has decreased – recovery seen as fragile.

The main economic challenge facing the UK remains consumer confidence. Industry leaders feel that consumer confidence is “terribly fragile”. Last year, the general election and volatility in financial markets created uncertainty. Now it is the EU referendum and recent terrorist attacks and threats that are causing the most concern. “The biggest confidence-knocker is terrorism right now,” one CEO said.

POLITICS AND GOVERNMENT: Industry feels politicians out of touch with one of UK’s most significant engines of growth.

The majority of those interviewed felt that relations with government had not improved in the last 12 months, citing the recent changes in the rates of the National Minimum Wage as a prime example. This was done with little or no consultation with the hospitality industry. Although the Living Wage itself was not viewed negatively by the majority of participants, all commented that their businesses needed time to plan.

BREXIT: The vast majority of business leaders would prefer to stay in the EU.

At the time of asking (January – April 2016), 74% of business leaders said they would vote to remain in the EU with only 18% wanting to leave. The remainder (8%) were undecided.  As one interviewee commented: “The idea that we can get divorced and will remain the same is unthinkable – we cannot contemplate a world where Britain is isolated.”

For respondents who are part of a global or, at least, pan-European business, building barriers feels counterintuitive to growing the business. As the European president of one global brand commented: “Anything other than staying in works against our business… but we have to be more ambitious for the UK’s place in the world.”

To read the full report click here.

The 2016 Report – Leading Through Complexity

*Published jointly by the British Hospitality Association and Heidrick & Struggles, interviews were conducted with 41 business leaders (Chief Executives, Chairs, MDs), running businesses with over 850k employees and £30bn in sales.

The range of organisations interviewed included: hotels & related services, restaurants & related services, pub sector, sporting & recreational activities, tourist attractions and catering services. The interviews were carried out between late January and April 2016.

• 92% of participants were male and 8% were female.
• Background experience: 66% operations, 14% commercial (sales / marketing), 7% finance, 13% other.
• 58% had experience operating outside of the UK.