What are the key challenges, opportunities and threats facing the travel sector?
The impact of the Brexit vote leaves many unanswered questions and with the government providing little further detail in the Autumn Statement on just how the UK will exit the European Union, even future predictions remain murky. Whilst Brexit is expected to have some impact, there are broader concerns, such as the impact of terrorist attacks and ongoing political turmoil in the Middle East, as well as the regulation of the sharing economy that are shaping how and where UK holiday makers are travelling.
We recently hosted a ‘Trends in Travel’ event where we discussed some of the key trends emerging in the travel sector, a summary of the main themes can be seen below:
- Over 50’s are the most resilient booking group
Analysis of 100,000 bookings between June – August 2016 showed the over 50s represented 50% of bookings, up from 40% during the same time period in 2015, and that they were spending more per booking than any other demographic
- The hotel pipeline is strong for the UK
Good news for the sector with inbound traveler and domestic tourism on the rise. However, one of the biggest challenges for the sector will be how hotels are staffed if there are restrictions on labour movement as a result of Brexit and how are margins going to be managed in light of rising payroll costs?
- Technology could fill this looming skills gap
The extent of this will vary by offering and presents a need for a fresh look at what different traveler groups value and a possible need to reskill the workforce. How will organisations achieve this? How will government initiatives on modern apprenticeships fit in here? Are staffing academies the way forward?
- The sharing economy – to regulate or not to regulate?
Regulation of the sharing economy remains a hot topic, with enforcement of existing regulations difficult due to the size of the sector. The need for different governments and jurisdictions to manage other economic factors such as housing supply and price pressure is also starting to have an impact.
Attitudes to regulation appear to be more relaxed amongst certain age groups. Does this require a flexible approach to regulation? Will we see the further development of the “sharing economy plus” whereby consumers pay more for the reassurance of sourcing their accommodation via a trusted brand or hotel network?
One example of the sharing economy is Love Home Swap, the world’s biggest home swapping group founded by Debbie Wosskow OBE. Debbie is committed to building the best home possible for the sharing economy in the UK:
“The UK’s top five sharing economy sectors may generate £140bn in transactions by 2025.
"It’s clear that the UK sharing economy is really taking off and the hunger is very much current: visits to sharing economy-related websites have tripled so far in 2016.”
Our aim at Grant Thornton is to help shape a vibrant economy. We aim to do this by creating insights and opinions through conversations and networking. We plan to build on these themes and more during 2017 by which time article 50 should have been triggered and we should have the results of the French elections. If you’d like to find out more and receive regular updates from our Travel, tourism and leisure team please subscribe below.