- Hotel managers struggling to recruit due to labour shortages as a result of Brexit
- Operating costs and maintaining standards also top list of concerns
- Improvements to back office systems preferred over customer-facing technology
- Survey of nearly 200 UK hotel managers covering trading and operations
Problems with recruiting new staff and retaining existing staff is the biggest challenge for UK hotel general managers according to EY research released today.
28% of UK general managers ranked staffing problems as the biggest challenge followed by 22% citing cost increases and inability to pass these onto guests. Maintaining hotel standards through capital expenditure is the third biggest challenge for hotel general managers (15%).
On the staffing front, 90% of respondents to the survey were also recruiting for unfilled positions and 54% of respondents have seen a decrease in non-UK residents applying for jobs at their hotels since the Brexit vote.
The UK hospitality sector is highly reliant on EU nationals, with between 12.3% and 23.7% of the sector’s workforce made up of EU migrants, according to figures from the British Hospitality Association. In addition, current uncertainty around a Brexit deal and subsequent implications for free movement are pushing wages up in the short to medium term. In the longer term, the supply of workers is highly likely to be affected following Brexit.
Christian Mole, Head of Hospitality and Leisure for EY comments: “Retaining and attracting staff remains understandably the biggest challenge for hotel general managers and, particularly with Brexit moving closer, a shortage of migrant labour is an overwhelming concern not only for hotels but the hospitality industry as a whole.
“This isn’t, however, to say Brexit is solely to blame for rises in staffing costs – the introduction of the National Living Wage and apprenticeship levy continue to have an impact and, with room rate growth at regional UK hotels in particular slowing down, hotels’ ability to pass on these costs to customers is becoming difficult.”
Pressure on costs
The survey found that hotel general managers are struggling to get on top of increases in operating costs which came a close second to staffing. The most popular response, chosen by 35% of survey respondents, is to increase rates followed by reducing staff or implement pay freezes (25%).
Christian comments: “Cutting staff is a strategy that might not address cost pressures in the long term or properly address the root causes behind labour shortages. It is, however, an interesting paradox given staffing is the greatest challenge for the majority of survey respondents.”
Back of house technology improvements preferred to front of house
According to the survey, the most popular solution for improving hotel overall performance is to upgrade back-of-house technology and systems (25%) – for example property management, reservations and revenue management systems.
Respondents chose this ahead of more directly customer-facing innovation such as automated check-in (22%) and voice technology and smart assistants (14%). There is also a considerable portion of respondents (17%) who believe customer data analysis would improve their hotels’ overall performance.
Room upgrades (27%) and common space upgrades (25%) were viewed as the capital expenditure (capex) projects most likely to drive profitability increases. Despite the challenges around food and beverage revenues, restaurants and bars were also highly ranked as a capex option (15%).
Christian continues: “Hotel management teams are clearly focused on sorting the nuts and bolts of their operations before embarking on the more visible aspects.
“It’s also interesting to see that respondents believe that customer data can play a key role in improving performance, suggesting that many hotels lack a proper understanding of what their customers value most, and hence what measures might have the most positive impact on overall performance.
“Unsurprisingly, a focus on room and space upgrades points to the prevailing view that defensive capex is the key priority in order to ensure that guest experiences meets expectations.”