The London based hotels of international hotel group Millennium & Copthorne is not being able to satisfactorily recruit employees from EU countries because of the uncertainty surrounding the imposition of Brexit in less than 50 days time, the hotel chain has said.
At present, employees originating from EU countries outside of Britain account for more than half of the total people it employs in London, the luxury hotel chain has said.
This was disclosed by the company while the company also announced a drop in its profits last year to £106m marking a drop of 28 per cent compared to the profit of £147m that the company had made a year ago.
The drop in the profits in 2018 was also attributed to other business environment factors including competition from online renting app Airbnb, a rise in the minimum wage levels and a threat of a full blown trade war between the United States and China.
The company also reported an astounding decline of 76 per cent year on year in its profits for the fourth quarter of last year which came at £7m.
“Concerns about Brexit have affected the Group’s UK hotels especially in London, where the hotels started to face difficulties in recruiting EU workers which currently comprise more than half of the London workforce,” Millennium & Copthorne said in its latest results statement.
The company also added that in the United Kingdom, it had incurred additional costs for labor because of the recent enhancement in the minimum wage which led to its poor performance in the country.
One of the major business performance related metrices for the hotel industry is the revenue earned per available room. Millennium & Copthorne also reported a drop of 7.4 per cent drop in that number in for its hotels in London. The company however also clarified that this was also partly because it had to temporarily close down its Mayfair hotel for refurbishment purposes.
Revenue per available room fell to £81.57 last year from £82.78 in 2017 across the group as a whole.
“The hospitality industry faced a range of geo-political and global economic headwinds in 2018, many of which look set to continue in the current year, including US/China trade relations, Brexit and increasing minimum wage levels in many jurisdiction,” said chairman Kwek Leng Beng.
“The shortage of talent – from rank and file to senior management – is intensifying with many new hotels being built around the world, not to mention the growth of Airbnb and serviced apartments.”
He also laid emphasis that all hospitality businesses would “need to evolve and embrace” the changes in the industry if they want to maintain profitability and thereby stay relevant in the industry.
(Adapted from BBC.com)