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Tom Roach is a partner in the Truro office of PKF Francis Clark with expertise in the tourism and leisure industries. Wealth Preservation for Family
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For the hotel industry, 2022 was the first Easter many leisure facilities were able to open in three years following truncated openings and unscheduled closure periods having put huge pressure on businesses and their staffing requirements during the pandemic.
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The tourism industry continues to face many opportunities and challenges in 2022 and at PKF Francis Clark we undertake benchmarking for bed nights and room nights to provide us with insight on the industry. Comparable data shows that occupancy was up over the summer period in both 2020 and 2021 and from July 2021 to December 2021, occupancy versus 2019 was up by 9.7%. From August 2020 to October 2020, occupancy was up by 7.7% on the same period in the previous year. The significant support provided to the sector to overcome some of the challenges it faced is being tapered out and by the start of the main 2023 season will be completely removed. VAT reductions have now ceased, and business is returning to normal, albeit with potentially higher staff sickness and difficulties recruiting generally. Helpfully, 50% rates relief has been extended to April 2023, which for many tourism businesses should equate to as much as 2.5% of turnover. EMPLOYMENT Staffing has become a common discussion point in the sector and this is a
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TALKING TOURISM
conversation which looks set to continue into the main 2022 season. With staff shortages expected to remain and many businesses focusing on recruitment, what should you be aware of? • The hotel industry employs a considerable number of workers from the EU and Brexit has had a significant impact on the industry. Obtaining the appropriate documentation to employ overseas staff, housing and working hours needs careful consideration • The interaction between limitations on rent charges for living wage purposes and benefit in kind rules can be difficult to navigate • Staff incentive plans have become common, although the mainstream tax incentive schemes are not available in the accommodation sector We are often asked for advice on accommodation and benefits in kind and recently our conversations have been focused on the essential provision of accommodation for staff. INFLATION RISES Inflation has arrived and is set to continue into 2022/3. When open last year, many accommodation providers benefited from a limitation on supply which drove prices. However, with energy costs increasing, wages continuing to rise and the impact this has on food and services, it is likely a lag in cost increases compared with tariff rises will catch up later into 2022
SPRING 2022
