Expert Panel Survey: current challenges and future predictions for the hospitality market

Dan Visser, Vice Chair & Digital Marketing Representative for Cumbria Tourism on the current skills shortage

“The skills shortage in the hospitality sector is a significant one. There is no doubt that the pool of people we can recruit from is smaller than usual. Where pre‐Covid and pre‐Brexit we would have expected a number of candidates to apply for roles, these days it is quite common to receive no response.

What we are finding is that people are accepting multiple roles and interviews and then taking their pick. It seems that the job options for candidates are both numerous and easily available.”

Q/ What Government support would you like to see for the hospitality sector in Cumbria?

“In this area, we have traditionally welcomed a number of people from outside the UK
coming here to work in hospitality, and I think this has given our sector great personality.
However, now, as they are no longer coming over to the UK, recruitment is proving hugely challenging.

There is huge merit in the different levels of skills brought in from those hospitality workers from abroad, especially those in front of house positions, as this is a skilful job which has traditionally been more highly valued abroad.”

Q/ What is the outlook for hoteliers, holiday property owners, restauranteurs, pub and bar owners in Cumbria?

“The demand from consumers is very strong: we have been seeing levels of demand I’ve never experienced in my 23 years in Cumbria! International outbound holidays seem to be picking up, but very slowly and this in our favour. So, we are getting lots of new visitors to the region for the first time and many local businesses are really benefitting.

As inbound tourism opens up, I predict desire from USA, China and Europe visitors to be very strong. However, the ability to find enough staff is the big concern: as an industry, can we hit the level of productivity we need to, whilst remaining sustainable and profitable?”

Q/ We’re seeing more British workers entering the hospitality sector – but there is still a considerable skills gap. What does the industry need to do to recruit more people into catering and hospitality to ensure it has sustainable talent?

“Our sector does not have a good reputation as a place to develop a decent career. There are some fantastic employers creating places where people work and live. It is vital that we work to change perceptions of our sector and provide year round employment.

We are now in a post-Covid world where people are looking for flexible working time patterns and shifts which work to support people’s overall wellbeing. We need to look at ways of engaging with potential staff and coming up with creative ways of working which embraces family lives and hobbies.”

Q/ In our recent survey on the latest staycation trends amongst UK consumers, the Lake District was shown to be equally as popular as Devon (14% each) and just a few points behind the most popular region, Cornwall. What does the increasing popularity of the region mean to residents, businesses, and visitors alike?

“In certain places it has been challenging, especially in popular areas, as one minute it has been deserted and then overnight you suddenly have a tens of thousands of visitors in a village. However, there is a real plus side to living in a visitor‐based economy, for example, this has really been brought home to me in the village where I live as we have a cinema which wouldn’t be there were it not for the holiday‐makers.

After the first lockdown when it was really challenging for the region, we are now all in a
much better place, harnessing the benefits of being such a popular location within the UK and working with communities and visitor businesses alike to really build on the popularity of Cumbria.”

John Haley, Partner at Edwin Thompson on key considerations for holiday let investment

“All areas of the Lake District and Cumbria were affected at the very start of the pandemic. At that time leisure businesses were naturally worried about the immediate and long-term effects COVID‐19 would have, however, many hotels, guesthouses and other leisure outlets have navigated the lockdowns and change in visitor patterns and turned what felt like the end of the world into positives and, in many cases, investment into their businesses and properties.

An interesting and positive pattern that has been echoed by many operators is that of repeat bookers and visitors immediately reserving accommodation for 2022 which suggests another strong staycation trend for the region next year too.

From a valuation perspective, in spring 2020 valuers were left uncertain about where prices might go and the estate agency market closed for three months. We were left in a difficult and uncertain time. However, what we found when everything opened up again was a pent‐up housing market but in Cumbria and the North of England in general, there was extra demand from purchasers from the south who wanted to move north and work from home, swapping more expensive smaller houses for larger dwellings with outside space and more access to countryside life.

There was also an increased demand for properties which can be used for holiday lets and this has had a positive effect on house prices within the region.

It is difficult to say how the values of leisure properties have fared during this time as they are valued with reference to their trading potential however with general values rising, demand increasing for live‐work businesses in the area and trading now strong, I think it is reasonable to assume that values have not decreased and are likely to be underpinned by the buoyant property market.”

Q/ How do you predict the hospitality accommodation market will look over the next 12 months?

“I think we need to remain positive that the hospitality accommodation market in the region will continue to be strong with the combination of good trading and repeat bookings already being made for 2022 and people rediscovering Cumbria for the first time. I don’t think the relaxation of travel restrictions is going to turn on the tap of foreign visitors, as this will take time for confidence to return as we learn how to live and travel with the pandemic, so the market will need to continue to be supported by staycations for the next few years.

From a value point of view, we live in an area where it is not easy to find sites and just build a leisure property at will and therefore supply will remains tight and with the increase in demand in the area, I can see values holding steady or even increasing further in the next 12 months.”

Q/ Our recent staycation survey revealed 86% of holiday accommodation owners have invested in their business during the pandemic, with 94% of them indicating they have made a long‐lasting positive change. Are you seeing any trends in terms of the types of changes accommodation owners are making to their properties from a valuation perspective?

“We have observed that, since the first lockdown in March 2020, hospitality businesses have used the time to improve their businesses and much of this has been upgrading accommodation and/or extending.

Leisure operators have used the time when they were forced close to improve their facilities and offering, particular outside space where possible and increasing the specification and quality of guest rooms and holiday lets. The closures have also allowed maintenance works to be carried out which suggests overall buildings should be in a better condition internally and externally than pre‐pandemic times.

From a valuation perspective, with an overall improvement in the standard of accommodation coupled with the strong visitor demand, there is the potential to increase room and holiday letting rates and thus improve turnover which should transfer into improved profitability and the values increasing. That said, we will not fully know the effects of the pandemic for some time and after the furlough scheme ends, business rate exemptions expire and VAT returns to the normal level”.

James Wilkinson, owner of The Three Shires, on trading challenges

“We have experienced a significant uptick in demand for the service we supply, both in terms of visitor occupancy and food provision. However, at the same time it has been very challenging to hire skilled people. Basically, there’s been more to do and not enough people to do it!”

Q/ Our research showed that the majority of UK consumers (69%) are willing to pay more for a holiday property offering a deep cleaning service and clear instructions on its Covid‐ 19 guidance, but what are the challenges you see amongst owners in recruiting, training and employing staff to carry out such services?

“I think that a deep‐cleaned property is an entry criteria for a hospitality business. Having said that, getting workers who are skilled to the level required is very hard. People seem to have lost the degree of work levels they might have had pre‐Covid, and as we all know, working in hospitality is very demanding, accompanied with not particularly high wages due to the margins involved.

Training is something that we mostly do on the job, and whilst more cleaning in general is required in a post‐Covid world, it in itself is not challenging. As far as recruitment goes, we have found that often there are no candidates for some of the roles on offer, which has meant that existing staff are tired as the summer season comes to an end.”

Q/ What measures would you like to see put in place in order to increase jobs and skills in the hospitality sector?

“As I see it, the cause of the issue is threefold: number one is that the pandemic has meant that people have been off for a long time and many have chosen not to return to the hospitality industry.

The second is that the hospitality sector needs to promote itself as a positive choice of career.

Thirdly, Brexit has caused foreign workers to return home and now they can’t come back as the Government hasn’t classed hospitality workers as skilled, whereas lorry drivers, for example, are classed as skilled workers. Hospitality needs to be viewed as a skilled job that people take pride in and young people can clearly see it as a career‐choice.”

A summary of the key challenges and predictions for the future of hospitality

“It is interesting to note the various challenges which our roundtable participants raised and there are definitely some positives worth commenting on, particularly the consensus on how staycations are here to stay, especially in Cumbria.

There is also a strong collective view about the desire amongst all of us for hospitality to be viewed as a skilled job and one which is of huge value to the local and national economy.

Over the lockdown periods, we noticed high levels of our hospitality customers requiring support and now this is back to normal levels, with a smaller proportion of our customers seeking support through individualised relationship management.”