Brexit Impact on Hospitality: A Case Study of Intercontinental Hotel

This case study analyzes the impact of Brexit on the hospitality industry, focusing on Intercontinental Hotel & Resorts in the UK. It highlights the challenges faced by the industry, including staff shortages, increased food prices, and decreased consumer confidence, all stemming from the UK's withdrawal from the European Union. The report reviews literature discussing Brexit's effects on immigration laws, labor availability, and overall profitability within the sector. It further explores specific challenges encountered by Intercontinental Hotel, such as rising import costs and reduced hotel visits due to economic uncertainty. Finally, the study suggests strategies for Intercontinental to mitigate these challenges, including staff recruitment and training programs like apprenticeship schemes, emphasizing the importance of planning to navigate economic uncertainties. The research methodology employs a positivism philosophy and a deductive approach, utilizing quantitative data collected from both primary (questionnaires) and secondary sources. The study concludes that Brexit significantly impacts hospitality companies, necessitating proactive measures to address staff shortages and rising costs. The document is available on Desklib, a platform offering study tools and solved assignments for students.

Aim: To analyze the impact of Brexit in hospitality industry. A case study on Intercontinental
Hotel & Resorts.
Introduction
Brexit is a profound economic event that affected the entire country significantly. As a result of
Brexit, UK withdrawal from European nations. UK is no longer a part of EU that hamper the
trade relationships as well. Brexit not only affected the hospitality industry but it shattered the
entire economy of the country. In context of short-term impact of Brexit, it caused loss to great
number of employees due to change in the previous laws. Now, it is prohibited to exchange
goods, labor and other raw material to European countries. It caused staff issues within
restaurants & PUBS of UK. There is shortage of workers and companies are desperately looking
forward to fill the positions as soon as possible. Also, the price of food also got enhanced due to
the impact of Brexit within the country. There is prediction that food prices will be rise between
3 to 5 % in upcoming years. Also, the brexit has shrink the consumer confidence that will put a
direct impact on their buying capacity. Therefore, Brexit caused great harm to the overall sales
and profitability of the hospitality industry of UK. The present report will analyze the impact of
Brexit on restaurants, Pubs and hotels of UK. The report is based on Intercontinental that is a
well-known hotel group of UK. It was founded in the year of 2003 by Juan Trippe. The report
will cover the challenges caused by Brexit along with the suitable ways to overcome those
challenges.
Objectives:
 To understand the impact of Brexit on functioning of hospitality industry.
 To identify the challenges faced by intercontinental hotel due to Brexit.
 To develop effective ways for intercontinental to deal with the challenges caused by
Brexit.
Literature Review:
The impact of Brexit on functioning of hospitality industry.
According to Radley (2022), it is analyzed that hospitality industry of UK has been hit hard by
Brexit as it caused changes in immigration laws, food prices & regulations and more. It caused

change in the entire immigration system of UK so that non-UK workers who was earning less
than 20480 was not allowed to employees within the country longer. The hospitality sector relied
on EU staff and workers significantly. Because of the harsh migration laws nearly 300000
hospitality workers left their jobs to return to their home country. It caused staff shortage within
the country that put a direct impact on daily operations. It is analyzed that Mitchells & Butlers,
the largest pub group of UK has been lost 9000 staff since last year and they are desperately
looking for new employees to fill the position. As per the prediction of Fitch, this shortage will
reduce down the overall profit margin of hospitality industry in significant manner. In short run,
the hospitality companies will face issues of lower profit as they have to pay high wages that will
minimize their overall profit margin (The impact of Brexit on the Hospitality sector, 2021). There
is prediction of rise in the overall food price between 3 to 5 % that will put major impact on sales
& revenue of hospitality organizations. In addition, the Brexit has been enhanced uncertainties
across the nation. As a result, people are likely to avoid to go for dining outside. It puts a
negative impact on the overall sales of hospitality companies within the country. On the top of
that, increasing food price can also let people off from spending more amounts in food.
The challenges faced by intercontinental hotel due to Brexit
According to Farzad, 2020, the Brexit caused numerous challenges for the overall hospitality
industry. They faced shortage of labor. The condition is severe as the employees have been
return to their home countries and not likely to return. Due to absence of staff, hospitality
organizations are facing difficulty to offer the best possible services to the customers that will
directly put impact on their revenue. On the top of that, they need to pay high wages to recruit
the staff and also need to provide them training. As a result, the overall expenses are increasing
in comparison of profit margin. This will affect the performance of hospitality business
organizations in profound manner. In context of Intercontinental hotel & resorts, they also faced
staff shortage issue due to Brexit which hamper their overall functioning. Further, it also
enhanced the cost of import goods. Due to the uncertainity caused by Brexit, people are also not
likely to visit the hotel and resorts. In addition to this, the food prices have also been increased.
After the COVID-19, people does not spend huge amount on food that affects the overall profit
of the respective company. Therefore, Brexit caused huge challenges for intercontinental in

terms of creating staff shortage, increasing the price of food and more. These all challenges are
likely to put a profound impact on the overall performance of the respective company.
Ways for intercontinental to deal with the challenges caused by Brexit
According to Cripps (2022), it is analyzed that Brexit caused numerous challenges for
intercontinental hotel and resorts. They are facing issues in terms of lack of staff, increasing
price of food, decreasing the revenue and more. To deal with such issues, it is important to take
appropriate actions. However, the sudden economic events such as Brexit and COVID-19 cannot
be controlled but it is possible to deal with the negative consequences of such events. For this
purpose, the manager of Intercontinental needs to structure suitable plans. Through planning,
they can easily face the uncertainties in an appropriate way. Planning is helpful in dealing with
impact of uncertain events profoundly. In this regard, the respective company needs to planning
the staff recruitment and training strategies so that they can easily deal with the issues of staff
shortage. In this condition, they can adopt apprenticeship scheme where the candidates will have
the opportunity to gain practical exposure while completing the business management degree. By
this way, the company can manage skill gap within the society and they will be able to get
employees at adequate pay rate. By offering training, skills of the individuals can be uplift so that
they will contribute in growth of the company in future period of time.
Research methodology
Research methodology is considered as an important part of research as it demonstrates the way
to collect and analyze the data. In research methodology, various components are covered so that
the entire project work can be completed in timely manner. In this context, research onion
framework is taken into consideration. Elements of the respective framework are mentioned
below:
Research philosophy: While undertaking research project, philosophy refers to the believe of
individuals regarding a specific topic. It is useful in terms of analyzing the believes of
respondents in an efficient manner. Mainly two major philosophies are used in project work such
as interpretivism and positivism. In current context, positivism philosophy has been followed as
it is based on application of quantitative techniques to get authentic outcomes.

Research approach: Research approach is considered as one of the most important part of the
entire research project. From two main research approach such as deductive and inductive, the
present report is based on deductive approach as it helps in completing a project in systematic
way with the help of appropriate information.
Research methods: There are two major methods of research named as quantitative and
qualitative. Out of these two methods, the present report is based on quantitative analysis where
the data is collected and analyzed using numerical tools. The respective method is useful in terms
of getting authentic & reliable outcomes in future period of time.
Research strategy: In present context, use of survey method is appropriate as it will help in
terms of gaining detailed information regarding a specific topic. With the help of survey, the data
can be collected from vast population that will make the researcher enable to get appropriate
results in future period of time.
Data collection method: There are two major methods of data collection such as primary and
secondary. In current project, both methods of data collection have been used. In context of
primary data collection, the data has been gathered through respondents using questionnaire tool.
On other side, necessary information has also been collected from secondary sources like
websites, articles, journals and more.
Participants: For completing the present research work, participants will be selected from
employees & consumers of the respective company as they will provide necessary informant for
completion of research project. In this regard, 30 participants have been selected using random
sampling techniques. By this way, the researcher will be able to get fair results.
Ethics: Following ethics during the research study is important. For this purpose, various ethical
considerations such as confidentiality, anonymity and more have been followed in the present
research project.
Potential outcomes:
The present study is helpful in understanding the impact of Brexit within hospitality industry.
Through the research, it is found that Brexit is affecting the hospitality companies of UK in
profound manner. It is creating significant challenges for the companies in terms of staff

shortage, increasing the food prices and so on. These challenges are likely to affect the progress
of hospitality company in profound manner. In this context, intercontinental is highly influenced
with the impact of COVID-19. they also faced staff shortage issue due to Brexit which hamper
their overall functioning. Further, it also enhanced the cost of import goods. Due to the
uncertainity caused by Brexit, people are also not likely to visit the hotel and resorts. To deal
with such issues, it is important to take appropriate actions. However, the sudden economic
events such as Brexit and COVID-19 cannot be controlled but it is possible to deal with the
negative consequences of such events.
Risk register
Risk shows the possible threats that will be faced by a business entity during a project.
Lack of response of respondents is a major risk that is often faced by a researcher while
completing the project work. Hence, it is determined that the information will be share using
mails and questionnaires. Additionally, timely reminder will be given to get appropriate and
timely responses from the participants.
Maintaining authenticity and confidentiality of the information is also a major threat. In present
context, the investigator faced issues in terms of keeping the data confidential and safe. For this
purpose, the data has been collected from reliable sources and further it will store in a systematic
way.
References

The impact of Brexit on the Hospitality sector, 2021. [Online]. Available through :<
https://www.linkedin.com/pulse/impact-brexit-hospitality-sector-dibyananda-brahma-db-/>
The impact of Brexit on Hotle industry and 2020.Outlook.[ Online]. Available through :<
https://www.hospitalitynet.org/opinion/4096893.html/>
The impact of Brexit on the UK hospitality industry and what businesses can do, 2022.[ Online].
Available through :< https://trailapp.com/blog/impact-brexit-hospitality/>