Hospitality Industry towards EU Workers

Introduction

In the post-Brexit era, there is high percentage of job loss in the UK, as the EU workers are leaving the UK and it hampers various sectors including industrial, manufacturing and service sector to ensure future growth and sustainability. The study is related to identify the Impact of Post-Brexit towards the attractiveness of the UK’s Hospitality Industry towards EU Workers. Through analysing the perception of the EU employees, it is possible to acknowledge the effects of the incident of Brexit on the EU workers and identify the reasons of leaving the UK. The research would be beneficial to analyse the effects of Brexit on EU workers as well as identify the managerial role and strategies to hire the staff in London as well as recruit the EU members again for the hotel industry in London, so that it is possible for the country to expand their hospitality industry in near future.

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Problem statement

In June 2016, the United Kingdom (UK) had a referendum to make a decision about whether the nation should or not leave the European Union. The UK has been part of the political and economic bloc since 1973(BBC, 2019). The result of the public vote was in favour of Britain’s exit from the union. This event is popularly termed as the ‘Brexit.’ At the moment Britain is yet to leave the EU, and it is expected to have left by latest in 2020 (BBC, 2019). Britain leaving the EU has a domino effect, such that various areas of society and economy will be affected, especially in the services industry. The rationale for this study grows out of the imbalance created by the Brexit, such that, EU workers are leaving the UK and among the many sectors which will be feeling the pinch will be the hotel industry. In the UK, the hospitality

industry workforce includes 43% foreign nationals (Wingett, 2016). By 2017, there loomed news reports concerning the hospitality industry having difficulty in filling up job vacancies, especially after the passing of the Brexit vote, which caused the number of EU citizens in the nation to drop (Rumney, 2017). Also, some speculation exists that; it would take 10 years to replace the void left by EU workers in hotels and restaurants (O'Carroll, 2017).

Research Aim, Objectives and Questions

The aim of this research is to identify the impact of post-Brexit towards the attractiveness of the hospitality industry to EU workers. To further develop the overall purpose of the research, the following objectives will be the guide:

To determine the new EU workers’ perceptions towards working in UK’s hospitality industry for the first-time after Brexit

To find out the likelihood of previous EU workers’ perceptions towards working in the hospitality industry after Brexit

To estimate the vacancies filled in hotels and restaurants in the UK post-Brexit

To acknowledge the strategies to hire EU employees and the travel agents and the staff in London for the hotels in London after Brexit

To identify the management strategies to fulfil the vacancies of the hotel industry in London

To recommend some suitable suggestions for balancing employment of the EU members in the hotel industry of London

What do new EU workers expect when they acquire new jobs in the UK’s post-Brexit hospitality industry?

How do previous EU workers feel about the Brexit vote on the future of their work in UK hotels and restaurants?

How fast will the vacancies in the UK’s hotels and restaurants be filled after the Brexit?

What are the strategies to hire EU employees and the travel agents and the staff in London for the hotels in London after Brexit?

What are the preferred the management strategies to fulfil the vacancies of the hotel industry in London?

What are the recommended suggestions for balancing employment of the EU members in the hotel industry of the UK?

Stages of the research

The research is related to analysing the impacts of Post-Brexit towards the attractiveness of the UK’s Hospitality Industry towards EU Workers. In this research, the problem statement and the overview of the research is effective to develop clear ideas and process of the research. The research aims and objectives are developed well to follow a suitable step so that the researcher can progress in the study and fulfil each objective successfully through data collection and analysis. After developing the research aims and objectives, it is possible to demonstrate the literature review with proper findings of the employment in the UK after the incident o Brexit, as well as the role of British Hospitality Association (BHA) and hiring and management method to recruit the staff in the hospitality industry. The literature review is effective to collect relevant secondary data and improve understanding about the research topic. After literature review, the research methodology will be chosen to collect primary data and select right data analysis technique to analyse the impacts of Post-Brexit towards the attractiveness of the UK’s Hospitality Industry towards EU Workers. Data collection and findings will be beneficial to represent the collected data and analyse it efficiently with utilising the literature sources. The conclusion and recommendations will also be effective for the researcher, where the researcher will try to suggest some suitable recommendations for hiring the staff and the EU members in the hotels of London.

Literature Review

The Brexit vote spells a variety of economic outcomes, which will take a heavy toll on the voters. Since the referendum, different studies have been published making projections and offering analyses that conflict one another. Eventually, it is difficult to judge which study is more reliable than the other because it is also hard to tell which research work has implausible assumptions or is generally sloppy or one which makes assertions that are unwarranted (Begg & Mushovel, n.d.). International agencies like the OECD and IMF are also part of the debate by not only investigating Brexit’s impact on the UK but also on the global economy. The Bank of England has also sensitized its duty to communicate its findings, especially where financial stability is affected (Begg & Mushovel, n.d.)

According to FTI Consulting (2017), Brexit will trigger several commercial challenges in the hospitality industry, especially with the industry’s connection with hotels, events, travels, and restaurants. Some of the challenges to be expected include pressure from internal and external environments. For example, intrinsic pressures in hospitality will concern workforce, such that there will be many issues concerning the ability to recruit skilled labour. Extrinsic pressure will grow from increasing inflation, which threatens the disposable income in the hospitality business. Innovation challenges will be experienced where hospitality firms will have to keep up with rapid advancements in technology (FTI Consulting, 2017). Regulatory burden arising from Brexit will be experienced, too, whereby certain commercial contracts will have to be revised while the UK still operates under particular EU principles.

In August 2019, the UK government drafted a contingency plan known as “Operation Yellowhammer” in preparation for a no-deal Brexit (Reality Check Team, 2019). Upon releasing the contingency plan, the UK government announced that it would incur $2.1 billion expenditure to plan for a no-deal exit from the EU. The Operation Yellowhammer document reveals that businesses, including those in the hospitality sector, have a low degree of readiness for the no-deal agreement, and this degree is expected to decline further because the no-deal agreement fails to paint a future which they can make sufficient preparations (UK Government, 2019). In addition, fatigue from the EU exit will further limit business preparedness. On the larger picture, the preparedness is not uniform among every business because bigger firms have the capacity to acquire better contingency plans compared to the medium- and small-sized businesses.

The Office for National Statistics projects that the hospitality industry will experience financial growth by 1% in the first quarter and by 2% in the second quarter (FTI Consulting, 2017). However, this growth is threatened by the impact of the no-deal agreement will have on the food industry. It remains uncertain the impact that Brexit will have on food prices, although, what is certain is that the food producers that serve the UK market will definitely be impacted (Hogan Lovells, 2019). According to the Support Training & Services (STS) Limited report on food solution, there looms a significant dangerous effect of Brexit both the food manufacturing and hospitality industries (Support, Training & Services Limited, 2018). The STS panel for food safety includes experts in food safety matters present in the hospitality industry and popular chains of restaurants. This justifies the first research question which seeks to find the impact of Brexit in the food industry as it relates to the hospitality industry.

The Virtual College considers hospitality as one among the areas of the food and drink industry, which will be affected by the Brexit. A no-deal kind of Brexit is greatly detested in the food and drink sector because of the adverse consequences it will bring about. Every year, over £20bn worth of food is exported from the UK, and 60% of this is traded to the EU (Virtual College, 2018). If the UK proceeds using the WTO rules in trading with the EU, food exports will incur higher tariffs. The backlash from this event will be that food will be cheaper inside the country due to a saturation of food products in the market. For the hospitality industry, low price of food will be partially beneficial, although so much will be lost out on variety. Also, the hospitality industry, to a great extent, depends on food imports from the EU (Virtual College, 2018). Considering that the EU will enforce higher tariffs on goods entering the UK, food imports will be more expensive, and together with the delays and border issues, there is a likelihood of having food shortages to a certain extent (Virtual College, 2018).

In a study by Sima (2017), hospitality is one of the areas that will be affected when the tourism industry becomes affected by Brexit. The study also explains how, at the moment, there lacks a settled projection on how Brexit will settle out on the domestic, inbound, and outbound tourism in both the long and short term. Travel associations conducted research before and after the referendum, and mass- and social-media conducted polls to determine the general perceptions and feelings among members in the tourism industry (Sima, 2016). While some felt that major disruptions would be caused by the tourism industry, others remained indifferent especially because the world is now like a globalized society, and the population is highly mobile today. Sima (2017) asserts that 8 out of 10 nationalities that visit Britain are EU members. Changes in border controls will have a significantly adverse effect on movement of tourists from the EU into Britain. This difficulty will grow out of the need for EU residents to possess UK Visas and UK travellers to have EU Visas. The need to apply for UK Visas appears to be a source of discouragement for EU nationals who intend to visit the UK (Sima, 2016).

The British Hospitality Association (BHA) Chief Executive, Ufi Ibrahim, in a discussion about the impact of the referendum outcome on the hospitality and tourism industry, made the point that workers and businesses were already experiencing a negative effect on the field of recruitment. This negative effect arose from the EU workers' feeling of being unwelcomed and the general uncertainty concerning the Brexit. In addition, back in 2015, the BHA outlined priority threats and opportunities that are presented by Brexit. These priorities include job protection, balancing the economy, upskilling Britain, taxation and competition, deregulation, Visas for tourists and a fair and competitive digital market.

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On job protection, the BHA confirmed that the tourism and hospitality industry has over 180,000 businesses that employ 4.5 million people. This industry is the fourth largest in the nation, and 90% of employees have permanent employment. At least 15% of workers in this industry are from the EU, and 35-40% of these workers are based in London. This industry, which is considered as being labour intensive, keeps growing and this increases demand for more staff members (British Hospitality Association, 2016). The demand cannot be met by the domestic workforce alone, and with the Brexit, there is likelihood that limited access to EU workforce will constrain the sector. The tourism and hospitality industry is highly competitive such that when labour supply is limited, labour costs will increase and eventually threaten business sustainability.

It is important for the hospitality industry in the UK as well as BHA to develop effective strategic planning o hire the staff in London and also encourage the EU members to join the hotels in London. BHA is the non-governmental representative body for the hotels, restaurant, leisure outlets and clubs and in this regard, the human restore management strategic planning and hiring the right members in the hotels and restaurant are effete to attract the EU members to work efficiently for contributing positively in growing the UK hospitality industry sustainably. BHA utilises the government of the UK as well as media and communication to promote the job vacancies and attract the EU members to get job in London and get attractive incentives and salary packages according to their skill and efficiencies. BHA promotes the British hospitality industry across the globe and constant public awareness boosted the efforts o the government to establish the hospitality industry in the UK and attract the efficient staff to get hired with efficient remunerations.

Additionally, there are effective factor that are contributing in managing the human resource and in this regard growing membership of the BHA, positive influence of the public, commendable job structure, remuneration and incentive structure for the staff and dynamic nature of the organisations are effective to attract the EU members and recruit them successfully. On the other hand, there are several campaigns by the BHA which are beneficial to attract the EU members in the UK. Firstly, inspiring the next generation through creation of three hundred new jobs in the hospitality industry by the year 2020 is one of the campaigns which influence the EU members to get hired or the hotels and restaurants. Additionally, facilitating access by requesting and demanding the government of the UK to improve the process of together with cost and the perception of accessing a visa to the UK is another strategic move of the BHA to encourage the EU members and influence them to get effective job as per their capabilities in London. The strategy of being responsible hospitality is another strategy to hire the employees successfully in London, where the maximisation of the social community values by waste reduction, managing employee’s safety and security, trusted food and healthy environment are beneficial to maximise the values for the social communities and attract the employees to contribute positively for the social values.

On taxation and competitiveness, BHA suggests that the government ought to develop a taxation system which greatly regards tourism and hospitality as the key exporters and employers, and allow businesses to make investments in their products and staff. Although the drop in the value of the Sterling Pound appears attract to tourism in the long-run, it ought not to be considered as a value proposition point for international consideration as a tourist destination. To avoid this situation, BHA is an active supporter of the Campaign to Cut Tourism VAT such that the government reduces VAT from 20% to 5% (British Hospitality Association, 2016). Higher VAT following the Brexit will disadvantageous because it will only attract international visitors while jeopardising the long-term profitability of the industry.

Methodology of the research

The methodology of this research will involve an inductive qualitative study. Data collection will be done using questionnaires and interviews, which will be administered both physically and electronically. A list of both open- and close-ended questions shall be used in the questionnaires and the interviews. The target population for this research will be staff members of the finance departments of the hotels in London as well as travel agents working for various travels advisory firms in London as well as in EU countries.

The preferred sampling methods shall include convenience sampling and stratified sampling. Convenience sampling is chosen because it will be easier to identify and approach hotel staff and travel agents at their time of availability. Stratified sampling will be used because it would be more appropriate to acquire information from participants who work in various organizations in the hospitality industry. The sample size is expected to consist of 50 respondents and depending on their availability, a questionnaire or interview will be administered. The potential difficulties that will be faced by this study will be the ability to contact the participants to acquire response necessary for the study. Also, time is a constraint because there is need to balance between time for work and preparing the study.

Time Plan

Time Plan

References

Alomrani, A., 2017. Brexit Impact on Employment within Hospitality Industry Windsor/Heathrow Marriott Case Study, s.l.: s.n.

BBC, 2019. Brexit: All you need to know about the UK leaving the EU. [Online]

Begg, I. & Mushovel, F., n.d. The economic impact of Brexit: jobs, growth and the public finances.

Benton, T. et al., 2019. Food Politics and Policies in Post Brexit Britain. Energy, Environment and Resources Department & Europe Programme.

British Hospitality Association, 2016. British Hospitality & Tourism Industry Brexit Strategic Response. s.l., s.n.

CIPD, 2018. Preparing For Brexit Through Workforce Planning. [Online]

French, S., 2018. Between globalisation and Brexit: Migration, pay and the road to modern slavery in the UK hospitality industry. Research in Hospitality Management, 8(1), pp. 23-31.

FTI Consulting, 2017. Impacts of Brexit on the Hospitality Industry. [Online] Available at:

Hogan Lovells, 2019. Brexit: Food Industry Implications. [Online] Available at:

House of Commons, 2017. The potential impact of Brexit on the Creative Industries, Tourism and the Digital Single Market. s.l., s.n.

Reality Check Team, 2019. Brexit: What does Yellowhammer say about no-deal impact?. [Online]

Rhodes, C., Tyler, G., Woodhouse, J. & Pepin, S., 2018. Effect of the UK leaving the EU on tourism and the creative industries.

Rumney, E., 2017. Brexit: Restaurants and hotels feel the pinch as EU workers leave the UK. [Online]

Sima, C., 2016. Brexit Impacts on Tourism. s.l., ResearchGate.

UK Government, 2019. Operation Yellowhammer. [Online] Available at:

Virtual College, 2018. How Brexit Will Impact the Food and Drink Industry. [Online] Available at:

Wingett, M., 2016. Foreign Nationals Make Up 43% of Hospitality's Workforce. [Online] Available at:

Wu, C., 2017. Hotel Industry within "Brexit" in London. [Online]

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