Over-dramatic headline and image? Maybe not. Enterprise Ireland has described Brexit as the most significant economic challenge of the last 50 years. They are advising clients to mobilise now and prepare for a hard Brexit.
Brexit has implications for exporters, but also significantly for us in the tourism and hospitality sector here at home. Visitor numbers to Ireland from Britain this year are down 6% compared to 2016. A weakening sterling makes Ireland increasingly expensive for British visitors. But its not all bad news, overall tourism is up 3% in 2017 to date, with numbers from Australia and developing countries up almost a whopping 22% in May. However, the weakening sterling will also make Britain increasingly competitive at attracting overseas visitors you would like to see come to Ireland. It is this currency challenge that may place increasing pressure on the hospitality sector over coming years. Other campaigns such as Buy British have the potential to reduce tourism and travel outside the UK.
Hospitality providers need to begin planning for the impact that Brexit may be already having on your business, and the increasing impact it is likely to have over the next few years. Here are 6 hints to get you started:
Identify how much of your business is dependent upon overseas tourism through customer feedback and by getting close to your customers. This will give you a measurement of the potential impact which reducing UK tourism could have on your revenue.
If you market abroad, consider switching some of your marketing efforts to other foreign countries which are seeing increasing numbers of travellers to Ireland and away from Britain which is seeing a reduction in traveller numbers. Ensure that your marketing is properly focused to generate a return. Improve your efficiencies and marketing to increase your margins and provide a cushion against Brexit. This marketing blog post may also be of interest.
Identify areas where you can reduce costs and make your business more competitive against your competition at home and abroad.
Identify ways that technology can increase your revenue and reduce your wastage.
Review where your supplies and goods are originating. Prepare for delays in supplies from the UK and potential increased administration. Identify alternative suppliers now and negotiate price reductions from your existing suppliers. Yes your distributor may be based 100 yards away, but has he prepared for Brexit to guarantee your supplies and prices?
Understand the regulations relevant to the sector, and be aware that UK supplies have the potential to become non-compliant after Brexit. This applies to everything from beef to cooking fat. Contact your suppliers and confirm that your raw materials will continue to meet EU Standards.
We all know the challenges which already exist in finding good staff for food and drink service businesses. Do you hire UK staff on temporary or permanent contracts? You need to quantify the effect on your business if these staff are not available, and be proactive in recruitment from the UK now if you have open positions.
For areas of your business which may be affected by Brexit, look at backup options elsewhere and have contingency plans in place. You have time now to attract visitors from elsewhere, to increase your number of Irish customers, to check your supply chain and renegotiate prices with suppliers. To re-focus your marketing. But you wont have time in 18 months. Start now.
Enterprise Ireland has created a Brexit Scorecard to evaluate how prepared your business is for Brexit, and although not specific to hospitality, they have some good advice available on their website.
What tip can you share on preparing for Brexit?