While the full impact of Brexit is yet to be felt, we do know Article 50 will be triggered by the end of March 2017 and that this is likely to send shockwaves through core industries in the UK. As a merchant cash advance lender, we work across many of these key industries, one of these is the leisure industry, notably lending to pubs, restaurants and hotels, and as such we have put together these predictions based on what we know, and what we can expect within the industry in 2017.
Potentially Higher International Footfall, but Reduced Spending
One of core factors will be a drop in the strength of the pound – we have already seen this with the pound falling to a 35 year low against the dollar following the announcement that Britain would leave the EU. For hotels in particular this means we are likely to see great inbound tourism, but for pubs and restaurants this could mean higher running costs on imports and tighter budgets within the UK – resulting in reduced disposable income.
London to Remain Strong (But Not As Strong)
In terms of global comparisons, London is likely to have occupancy levels of over 80% in 2017, this maintains 2016 figures but does not take into account the addition 7,000 rooms being built in various hotels around the capital – nor those who rent homes through websites such as AirBnB.
The average room price in London in 2017 is expected to be £142.
By nature this passes onto pubs and restaurants – particularly where corporate functions and hospitality are concerned. It is expected average decline in 0.5% of KPIs will be seen across London in 2017.
Regional Growth Looks Strong
Across the rest of the UK 2017 could be considered a ‘growth year’ with an increase in Staycations and an increased effort from regional tourism boards to capture those coming into the UK with the pound at a low.
Room occupancy averages are set to hit a record high of 77% across key areas – such as Manchester, Liverpool, Edinburgh and Birmingham.
365 Business Finance provide loans for pubs and hotels through merchant cash advances. Get in touch today to find out more.