Brexit – The Importance of Contingency planning in the Hospitality Industry

With the Brexit deadline only 16 months away, but with no clear progress on how the UK will be affected by the EU fundamental freedoms of free movement of people and goods, businesses in the Hospitality industry, both large and small, should be preparing their contingency plans.

Our businesses will be particularly impacted by pressure on our labour force due to the availability of good quality labour and rising costs due to increased raw materials prices. Already we are seeing increased turnover in our hotel business with a corresponding increase in our “time to fill” KPI resulting from a reduction of supply in the labour market. This is particularly evident in our housekeeping and front desk roles. Input prices for goods have also seen recent rises with the impact of the weak Sterling starting to bleed through, however that weak Sterling does mean the UK remains very attractive to overseas travellers with the higher purchasing power of their Dollars, Euros etc.

So, what can be done? Certainly, businesses should be performing risk assessments in all areas of their business including purchasing (Forex, Tariffs and VAT impacts) Sales (customer demographics and geography) and staffing to understand how much of an impact there could be in each of those areas in the event of differing outcomes of the Brexit negotiations.

Based on that risk assessment, best practices could include:

Purchasing – A review of overseas vendors and assessment of whether a suitable UK based replacement vendor is available to avoid potential import tariffs and Forex risk. If a suitable vendor can be identified, how long would the lead time be on contracting with the vendor and arranging the delivery of those goods?

Sales – The potential redirecting of marketing campaigns to overseas travellers to promote your UK based business. These campaigns can be implemented pre-Brexit to take advantage of weak sterling but as always, the finance function should be tracking the efficiency of these marketing programmes to ensure overall returns in the marketing spend is accretive.


  • Identifying EU nationals and assessing “flight risk” in key positions or groups of roles that may be high risk and identify potential backfill candidates.
  • Ensure job descriptions are up to date and ready to be used in the recruitment process if roles become open
  • Perform a cost benefit analysis of bringing outsourced labour in house to guarantee continuous supply of good quality labour in periods of lowering labour supply.

These are just some of the areas where a proactive approach to contingency planning could mitigate some of the impact of Brexit. Being able to implement those plans efficiently and effectively could help to limit  your financial downside from an unfavourable Brexit outcome.