London’s strength as both a business and leisure destination has helped it ride out most travel downturns. In fact, despite the United Kingdom’s Brexit plans, London has remained a leading international destination for business travel in recent years.
But the stalwart business city’s travel economy could suffer if the U.K. leaves the European Union—particularly if it does so without a deal. London hotels could be in for trouble.
Shifts in hotel demand
Demand for rooms could fall as business travelers cancel or delay trips to London and wait out the aftermath of Brexit. A rosier scenario for hotels: A Brexit-related drop in the value of the British pound could actually increase demand by making London stays cheaper for international travelers.
Higher labor costs for hotels
But there’s a downside to that potentially good news. Busy hotels will need enough workers to keep up with the cleaning, cooking and front desk service needed to accommodate travelers. U.K. hotels rely heavily on employees from EU countries, and those workers are likely to be in short supply if Brexit happens. Hotels might have to raise rates to cover higher labor costs.
Dig into more Brexit-related business travel trends, and find out how the 2020 hotel market is shaping up worldwide. Download BCD Travel’s 2020 Industry Forecast.