Hospitality Issues of 2016

Hospitality Issues

As well as a range of food trends that took over 2016, there has also been a number of hospitality issues that have plagued the industry. We had a look to see what those challenges were and whether they could be overcome in 2017.

  • National Living Wage (NLW)
    In April 2016, the NLW was introduced. This meant that all hospitality companies had to pay staff, over the age of 25, at least £7.20 per hour. Resulting in a 50p increase on the previous minimum wage.

This change in wages led to a mixed response from the industry. Many chains, such as Starbucks and Five Guys, jumped on the bandwagon and increased their minimum wage. The NLW is set to rise again in April 2017, to £7.50, which is sure to put a strain on independent businesses. Especially if this rate continues to rise to £9 per hour by 2020.

  • Airbnb
    Airbnb appears to be monopolising the younger market and this does not seem to be easing off over the next couple of years. To counteract this, AccorHotels and Ennismore are set to launch their own brands that are set to appeal to the millennial audience.

The main issue that hoteliers have with this site is that it allows users to run potentially dangerous ‘pseudo hotels’. Airbnb has been quick to dismiss these claims and the site is set to impose a 90-day limit on London rentals, to allow the site to remain responsible and sustainable.

  • Vegetarian and Vegans
    There has been a rise in those reducing their meat intake this year. Thus leading to a rise in the number of veggie and vegan options that restaurants are offering. Many chains have monetised on this trend, especially Zizzi, EAT and JD Wetherspoon.
  • Rent Increases
    Rent prices in the capital aren’t low to begin with but they have increased even more so this year. This has led to well-established restaurants to close their doors. This doesn’t seem to be easing off in 2017, as a number of restaurants are coming up to their five-year review, which could lead them to have an average rent hike of 50%.
  • Brexit
    Brexit has affected every business in every industry and of course, the hospitality industry is one of them. The full effects of Brexit are still yet to be determined. Some companies have said that Brexit will not stop them from expanding, however, others have mentioned that they are concerned that it could restrict them from employing EU staff. This could lead to an increase in costs because they will have to recruit non-EU staff.
2016 has seen a variety of hospitality issues but the industry continues to soar through successfully. We look forward to seeing what 2017 brings for the industry and how the obstacles are overcome once again.