55,000 new rooms have been added to the EU Hotel bloc in the last 18 months. This has had the overall effect of reducing room rates by an average of 9 per cent. It’s the old supply and demand adage.
Brexit sees some challenges for the hospitality industry in the UK. Minimum wage and utility cost increases have had a double whammy on the industry, together with the drop in the number of Europeans who have come to work here. Other increases incurred by employers are in the employee national insurance, apprentice levy and compulsory pension enrolment schemes.
Management is now having to reorganise their business models to keep service levels high whilst running profitably and still offer decent service levels.
The challenge with new openings is that they increase the demands on established businesses qualified staff, who are aware of new opportunities in the expanding market place,
In terms of rates, some are offering lower room and meeting prices, to win the business. This is where GSC can advise and be helpful!