In a result that has shocked pollsters, pundits and the public, the United Kingdom population has voted to leave the European Union.
The referendum vote was decided in favour of the Leave campaign which polled 51.9 per cent of the vote (17,410,742 votes) compared with 48.1 per cent for Remain (16,141,241 votes).
The immediate effects of the aftermath included a drop in the value of the Pound against the Dollar to a 30 year low. At the time of writing the FTSE100 index was down 4.76 per cent at 6,029.63, a big drop, but still comfortably above the 5,536.97 of March this year. Prime minister David Cameron, who led the Remain campaign, is to step down in October.
But how is the vote likely to affect the serviced apartment, property and wider hospitality sectors?
Pre-referendum polls showed that the majority in the industry favoured remaining in the EU – a Serviced Apartment News online poll backed Remain by around three to one, and a British Hospitality Association survey of 41 companies revealed 74 per cent in favour of remaining. One of the main areas of concern was the implications for staff recruitment, when many hospitality business rely on EU citizens for staffing.
The serviced apartment sector reaction to the news was largely surprised but pragmatic.
Shaun Hinds, managing director EMEA and APAC at BridgeStreet Global Hospitality, said: “The serviced apartment industry is built on the principles of mobility, and free movement of talent and skilled workers. It’s a bad day to be British when the population has voted in this way. Having said that, our immediate priority is business as normal. I don’t think anybody really knows what’s going to happen over the next two, three or six months, the way through it is to stay focused and to keep doing everything we do every day to drive our businesses forward. The shock of today will dissipate as we move in to next week and then next month and so on. The fact is that Britain is a strong, leading global economy and I don’t think anyone who voted yesterday voted to give that up.”
Jo Layton, MD group commercial sales for The Apartment Service, said: “I am currently on business trip meeting global clients in our office in Madrid, and Charlie McCrow, our CEO is in our office in Lisbon as this news breaks. I have to say, I am personally disappointed with the news that we are out of the EU and Charlie and I have been working in advance with our leadership team to understand any potential implications for our business and our sector over the next few weeks and months especially.”
“From a business perspective, The Apartment Service is a truly global agency, with multiple business entities and associates across EMEA, The Americas and APAC. As with all global businesses today, we anticipate that there will be a period while the UK adjusts to this ‘new normal’, our first priority is to stabilise our communities. Our second priority is to positively move this new opportunity forward. Providing accommodation for many incoming advisors and visitors to the UK to help us to build a new platform for the future could create the most traffic inbound than we have seen in recent history. We will now be opening our trading routes fully and inviting more friends and businesses to work with us,” added Layton.
Industry figures in Europe also gave their reaction.
Tom Walsh, CEO of Dublin-based Staycity, said: “Staycity has business interests in several European countries and the UK is a very significant part of that. Although the Brexit vote will increase uncertainty in the near term Staycity believes strongly in the robustness and resilience of the UK market and we look forward to growing our business significantly here.”
Anett Gregorius, of Boardinghouse Consulting in Germany, said: I was very shocked about the result of the vote this morning as I didn’t think that the Brexit would actually happen. I think that it is not the right decision and that it only mirrors the current political concerns of some of Britain’s population rather than being an economical decision based on facts and figures. I can only imagine what the consequences of the Brexit will be in future but it is for sure that the European Union needs to take action and make the advantages of being part of a Union more understandable for everyone, so that this exit will remain the only one.
James Fry of Base Management, said: “As an Englishman I fear for the UK in the short term, as an operator of a serviced apartment brand in Switzerland, we welcome the change as we believe that we will see more companies relocating as the UK goes through a transitional stage and companies look to move to a stable political and economical environment.”
Piers Brown, CEO of International Hospitality Media, said: “The leave vote raises many questions for hospitality businesses across the UK. The UK serviced apartment sector is still growing and works within a network of partners, suppliers and customers. Many rely on a pan-European workforce and further afield. How will this be impacted going forward? How will Brexit affect the UK’s relationship with the rest of the world, who have long seen the UK as a channel to the wider continental marketplace? Will it make the country and Europe less appealing to foreign investment? I’m looking forward to hosting innovative and entrepreneurial serviced apartment leaders at the forthcoming Serviced Apartment Summit to explore the challenges and opportunities in steering our path to collectively thriving in what are now unpredictable times.”
Some industry figures speculated that a fall in the value of the pound would stimulate more inbound travel to the uk. John Brennan, CEO of hotel investment and hospitality group Amaris Hospitality, said: “We are now entering a period of uncertainly as Britain prepares the ground for exit. While the negotiation period could have an affect on the markets overall in the short-term, the hospitality sector is well-placed to remain robust during this period. International tourism is one of the most rapidly growing sectors of the UK economy as disposable incomes increase around the world. With sterling weakening on this news, the rest of the world will get more pounds for their currency, making the UK a cheaper destination to visit, and conversely making it expensive for Britons going abroad. We would, however, encourage government to provide clarity on the exit process and address the areas of uncertainty prompted by this decision as soon as possible.”
In terms of the UK domestic property market, Richard Donnell, insight director at Hometrack, said: “The near term prospects for the UK housing market now look very uncertain. The immediate impact is likely to be a fall in housing turnover and a rapid deceleration in house price growth as buyers adopt a wait and see the short term impact on financial markets and the economy at large. The decision to leave the EU will be most keenly felt in the London housing market which is fully valued and already facing headwinds. History shows that external shocks can reduce sales volumes by as much as 20 per cent with sales volumes already down over the last year. House price growth is already weak and running in low single digits in central London areas and modest price falls now appear likely in higher value markets as prices adjust in the face of lower sales activity. Even a sharp fall in the Sterling is unlikely to attract overseas buyers in the near term. Across London, where house price growth is running at 13 per cent, we expect the rate of growth to slow rapidly on greater uncertainty and market activity in the capital is set to remain disrupted until consumers and the financial markets can see a clear strategy to manage the process to a position where the outlook for the economy, jobs and mortgage rates becomes clearer.”
</p
