What is hindering your market at the moment?

In Destination Consulting, we operate across a broad spectrum of the leisure, entertainment, culture and sporting industries, serving operational businesses and capital development projects in the private and public sectors.

The private sector has been facing significant operational cost challenges, staffing issues, high inflation and elevated interest rates, making capital investment and financing considerably more expensive. Similarly, public institutions, including museums, have struggled with operational costs and limited, increasingly competitive public capital funding opportunities. The cultural sector, much like the broader UK public infrastructure, is suffering from years of underinvestment.

In addition, the 2024 general election was a hindrance across all markets as it caused decision making and investment to slow and stall. The resolution of the election and the new Government should help stabilise sentiment helping to overcome the political instability and turmoil that has persisted since 2016.

 

What opportunities are you seeing in your market at the moment?

Generally speaking, demand - meaning peoples’ intention to visit places or buy tickets-has returned to pre-COVID levels. As a result, visitor numbers are finally restabilising, and with some price point inflation which has protected revenues. The opportunity therefore is to take advantage and capitalise on this renewed consumer demand, particularly by offering genuinely compelling visitor experiences and good value for money.

However, there is a tension between this rebound effect and people's disposable income as the cost of living is still high, exerting significant financial pressure on many households. This creates a fragmented market of those that can afford interesting trips and those that can’t.

One driver of the improved visitor numbers is a resurgence in the international tourist market, which particularly benefits major cities like London, Edinburgh, and Manchester. Outside of these hubs, international tourism remains minor compared to the domestic UK market. This summer, the key opportunity lies in encouraging more British residents to travel within the UK, especially across various regions.

What’s the biggest change you have seen in your sector throughout your career?

My team operates as a consulting business, offering advice and dedicating our time to clients rather than focusing on closing deals. Over the 15 years I've worked in this field, I've noticed a significant shift in client expectations. Lead times have shortened, and patience has waned, resulting in clients seeking our services at the last minute and expecting faster turnaround times. Budgets are tight, but it's not simply a matter of wanting more for less money. Clients seem to accept receiving slightly lower quality reports or studies as long as they are quicker and cheaper – a worrying trend. This trade-off for short-term gains, such as speed and affordability, comes at the expense of longer-term essentials like quality. For example, a cheaper, quicker business plan might seem advantageous today, but it proves futile if it fails to withstand investor scrutiny in the future.

What has surprised you the most about your sector post pandemic?

A noticeable shift for the sector post-pandemic is the shrinking of geographies and market locations, which has been driven by the adoption of online meetings and communication.

Moreover, an unintended consequence, is a diminished quality of team collaboration due to reduced physical presence in joint office working sessions.

Historically, our operations rarely extended to the USA or Asia/Australia due to geographical constraints and the preference for local market advisors. However, Colliers has a specialist expertise in surf park advisory, a growing, young international market – especially promising in the surf strong locations of USA and Australia.

Combining our track record and experience with the normalisation of online meetings via Teams and Zoom has given potential international clients, including those in the USA, the confidence to hire us from the UK. Clients appreciate Colliers’ global network and our team’s surf park expertise, but it is only since the pandemic that online meetings have made it feasible for us to provide advice and services internationally with ease.

However, the prevalence of online meetings brings a distinct disadvantage: the dilution of quality in team projects. With far fewer face-to-face workshop sessions, projects often lack the collaborative creativity that is crucial for success. While online meetings have enabled us to be more efficient and reach a wider client base, they shouldn’t be relied upon exclusively. In-person workshops provide a crucial element of teamwork that consistently strengthens the overall project, and unfortunately, this vital component is being eroded.

What are your predictions for the next 12-18 months, in your sector?

One of our core specialisms is surf parks. Colliers is a global market leader in surf park viability and our team is frequently addressing client questions such as: What sort of surf scheme is appropriate? Will it work? How many people might come? What is the business plan? Can we make a return on investment?

We lead this service out of the Bristol office in the UK and have worked on over 30 surf related projects worldwide over the last 10 years.`

The next 12-18 months is a crucial stage in the sector as several new openings are expected to come on to the market. Currently, there are about 10 operational surf parks globally. However, many projects have been in planning and development, with many delayed though COVID, cost inflation and high interest rates. Now that many of these issues are being resolved, we anticipate the global supply of surf parks to double, with more than 10 to open over the next 12-18 months. This includes new sites in locations such as Edinburgh, Madrid, South Carolina and Virginia.

This phase is centrally important to proving the sector’s viability and attractiveness to investors.

​ What is hindering your market at the moment?

In Destination Consulting, we operate across a broad spectrum of the leisure, entertainment, culture and sporting industries, serving operational businesses and capital development projects in the private and public sectors.

The private sector has been facing significant operational cost challenges, staffing issues, high inflation and elevated interest rates, making capital investment and financing considerably more expensive. Similarly, public institutions, including museums, have struggled with operational costs and limited, increasingly competitive public capital funding opportunities. The cultural sector, much like the broader UK public infrastructure, is suffering from years of underinvestment.

In addition, the 2024 general election was a hindrance across all markets as it caused decision making and investment to slow and stall. The resolution of the election and the new Government should help stabilise sentiment helping to overcome the political instability and turmoil that has persisted since 2016.

​ What opportunities are you seeing in your market at the moment?

Generally speaking, demand - meaning peoples’ intention to visit places or buy tickets-has returned to pre-COVID levels. As a result, visitor numbers are finally restabilising, and with some price point inflation which has protected revenues. The opportunity therefore is to take advantage and capitalise on this renewed consumer demand, particularly by offering genuinely compelling visitor experiences and good value for money.

However, there is a tension between this rebound effect and people's disposable income as the cost of living is still high, exerting significant financial pressure on many households. This creates a fragmented market of those that can afford interesting trips and those that can’t.

One driver of the improved visitor numbers is a resurgence in the international tourist market, which particularly benefits major cities like London, Edinburgh, and Manchester. Outside of these hubs, international tourism remains minor compared to the domestic UK market. This summer, the key opportunity lies in encouraging more British residents to travel within the UK, especially across various regions.

​ What’s the biggest change you have seen in your sector throughout your career?

My team operates as a consulting business, offering advice and dedicating our time to clients rather than focusing on closing deals. Over the 15 years I've worked in this field, I've noticed a significant shift in client expectations. Lead times have shortened, and patience has waned, resulting in clients seeking our services at the last minute and expecting faster turnaround times. Budgets are tight, but it's not simply a matter of wanting more for less money. Clients seem to accept receiving slightly lower quality reports or studies as long as they are quicker and cheaper – a worrying trend. This trade-off for short-term gains, such as speed and affordability, comes at the expense of longer-term essentials like quality. For example, a cheaper, quicker business plan might seem advantageous today, but it proves futile if it fails to withstand investor scrutiny in the future.

What has surprised you the most about your sector post pandemic?

A noticeable shift for the sector post-pandemic is the shrinking of geographies and market locations, which has been driven by the adoption of online meetings and communication.

Moreover, an unintended consequence, is a diminished quality of team collaboration due to reduced physical presence in joint office working sessions.

Historically, our operations rarely extended to the USA or Asia/Australia due to geographical constraints and the preference for local market advisors. However, Colliers has a specialist expertise in surf park advisory, a growing, young international market – especially promising in the surf strong locations of USA and Australia.

Combining our track record and experience with the normalisation of online meetings via Teams and Zoom has given potential international clients, including those in the USA, the confidence to hire us from the UK. Clients appreciate Colliers’ global network and our team’s surf park expertise, but it is only since the pandemic that online meetings have made it feasible for us to provide advice and services internationally with ease.

However, the prevalence of online meetings brings a distinct disadvantage: the dilution of quality in team projects. With far fewer face-to-face workshop sessions, projects often lack the collaborative creativity that is crucial for success. While online meetings have enabled us to be more efficient and reach a wider client base, they shouldn’t be relied upon exclusively. In-person workshops provide a crucial element of teamwork that consistently strengthens the overall project, and unfortunately, this vital component is being eroded.

What are your predictions for the next 12-18 months, in your sector?

One of our core specialisms is surf parks. Colliers is a global market leader in surf park viability and our team is frequently addressing client questions such as: What sort of surf scheme is appropriate? Will it work? How many people might come? What is the business plan? Can we make a return on investment?

We lead this service out of the Bristol office in the UK and have worked on over 30 surf related projects worldwide over the last 10 years.`

The next 12-18 months is a crucial stage in the sector as several new openings are expected to come on to the market. Currently, there are about 10 operational surf parks globally. However, many projects have been in planning and development, with many delayed though COVID, cost inflation and high interest rates. Now that many of these issues are being resolved, we anticipate the global supply of surf parks to double, with more than 10 to open over the next 12-18 months. This includes new sites in locations such as Edinburgh, Madrid, South Carolina and Virginia.

This phase is centrally important to proving the sector’s viability and attractiveness to investors.

What one thing would you change about the industry if you could?

With regards to diversity, the property industry has come a long way and is moving beyond the initial identification and acceptance phase, with a proactive rebalancing, now addressing disparities in gender, educational, and cultural backgrounds. However, the sector still has significant progress to make – while it is changing, much more effort is needed.

In addition, what is often missed is why this is important. Diversity is not about doing it for the sake of it, because it seems right, or makes people feel better. It’s crucial because more diverse organisations are more successful – they generate better ideas and approaches. Diversity brings a multi-dimensional perspective which fosters innovation and productivity.

Take London, for example. As one the most varied places in the world, it thrives on its endless renewal and vibrancy. That same effect can be replicated within companies, organisations, and entire industries. Diversity is not just a moral imperative; it is a strategic advantage.

What could have the biggest impact on the property industry in the next 10 years?

There’s a saying about people commonly overestimating change over two years, but underestimating change in 10 years. With that in mind, we should absolutely expect significant change and evolution over the next decade.

I think the biggest impact will come from people – especially the younger generation.

The property industry will undergo changes in technology (like AI), investment trends, sectors and geopolitics. However, it will be nothing without the energy, enthusiasm and positivity of well trained, well managed young professionals rising through the ranks. To thrive, the industry must attract new talent and retain it effectively.

While AI will streamline processes and make them more cost effective, organisations will still require talented employees to maintain client relationships and steer the ship. More damage will be done to a property business by lacking skilled people, than from the absence of AI. Ultimately, the industry needs young professionals who can leverage AI to its full potential. So let’s start with prioritising the people.

What one thing would you change about the industry if you could?

With regards to diversity, the property industry has come a long way and is moving beyond the initial identification and acceptance phase, with a proactive rebalancing, now addressing disparities in gender, educational, and cultural backgrounds. However, the sector still has significant progress to make – while it is changing, much more effort is needed.

In addition, what is often missed is why this is important. Diversity is not about doing it for the sake of it, because it seems right, or makes people feel better. It’s crucial because more diverse organisations are more successful – they generate better ideas and approaches. Diversity brings a multi-dimensional perspective which fosters innovation and productivity.

Take London, for example. As one the most varied places in the world, it thrives on its endless renewal and vibrancy. That same effect can be replicated within companies, organisations, and entire industries. Diversity is not just a moral imperative; it is a strategic advantage.

What could have the biggest impact on the property industry in the next 10 years?

There’s a saying about people commonly overestimating change over two years, but underestimating change in 10 years. With that in mind, we should absolutely expect significant change and evolution over the next decade.

I think the biggest impact will come from people – especially the younger generation.

The property industry will undergo changes in technology (like AI), investment trends, sectors and geopolitics. However, it will be nothing without the energy, enthusiasm and positivity of well trained, well managed young professionals rising through the ranks. To thrive, the industry must attract new talent and retain it effectively.

While AI will streamline processes and make them more cost effective, organisations will still require talented employees to maintain client relationships and steer the ship. More damage will be done to a property business by lacking skilled people, than from the absence of AI. Ultimately, the industry needs young professionals who can leverage AI to its full potential. So let’s start with prioritising the people.

The changing demographic within the UK has resulted in a situation where, for the first time, there are more people of pensionable age than there are children under the age of sixteen. This, coupled with the aging workforce in the construction industry, both within the contracting and consultancy markets, means that it is an alarming time for the industry. Satisfying labour workforces and recruitment demands has become a very real and pertinent issue for both contractors and consultancies.

Recruiting people into the industry is not a new challenge, but the changing demographic of the country is exacerbating the problem, requiring immediate attention. ​

Challenges caused by the construction skills shortage

It is essential to view these challenges within the broader context of the changing modern world, including increased flexible working, EU worker policy, the implementation of modern construction methods, and the efficiencies being driven through these technologies.

However, in the short to medium term, the aging workforce is straining the labour supply, leading to increasing labour costs. Wages have risen by 6% from a shortage of skilled tradespeople.

This is putting upward pressure on outturn construction costs as clients and developers strive to make their schemes viable. ​ Contractors are grappling with inflation, supply chain disruption, and a diminishing supply of workers to choose from as costs increase. Some contractors have even been forced to cease trading due to these challenges. All this has been too much for some contractors and we have seen some notable companies cease trading.

In terms of growth, the UK will look to construction to kickstart the economy in Q3 2023 and beyond. However, the drain of resources will put sustained growth at risk and make it difficult to meet the aforementioned numbers over the next few years.

Construction has historically leaned on workers from the European Union to satisfy this demand but according to the ONS, between 2020 and 2017 there was a 42% decline in the number of EU workers, compared to just a 4% drop from that of UK workers.

It remains to be seen what the effect of the ‘Back to Work’ budget will have on the industry after the government has relaxed migration requirements for key workers and whether this will mitigate some of this decline.

What are some of the schemes trying to help?

The government is trying to do its bit by the introduction of schemes to flood the younger end of the industry with the next generation. One such initiative is the introduction of the T Level in construction. This new technical qualification can be pursued after GCSEs and is the equivalent of 3 A Levels. Schemes like this can be used in collaboration with companies to meet their resourcing requirements and prepare the apprentices for the workplace. The courses are two years long and include nine weeks minimum working with an employer as an industry placement.

Although similar to apprenticeships, T levels will be more classroom-based, and give young people a route to academic achievement in a technical role.

In addition to the T level, there is the Construction Skills Fund, funded by the CITB, which aims to set up training hubs across the country. The funding supports live projects, providing to onsite experience to nearly 20,000 participants. Major contractors Wilmott Dixon, Balfour Beatty, and Morgan Sindall are just some of the major players in this scheme and have directly hired individuals for various roles.

Opportunities to help mitigate the skills shortage ​

The skills shortage is also impacting the consultancy sector of the industry. There is still a large proportion of the workforce that is aging, and the industry needs to do more to attract young talent.

The consultancy workforce has still seen the effects of Brexit and Covid 19; the exodus of EU workers and ‘big resignation’ of the older workforce after the pandemic. This is compounded by the globalisation of the construction industry and the attractiveness of international markets such as Australia, New Zealand, and USA in drawing talent away from UK consultants.

To address this, the Colliers Bristol Project and Building Consultancy team are actively contributing to rebalancing the scales by having over 25% of the team composed of apprentices. Two of them are pursuing their education at the University College of Estate Management, while the other two are enrolled in the local University of the West of England. ​

Additionally, there are a further two apprentices within the Bristol office that are part of the larger Colliers ‘Emerging Talent’ programme’. ​

Applicants are being encouraged for the next intake in 2024 and applications will open in autumn 2024.

In conclusion, there is a growing recognition within the industry of the challenges we currently face, particularly in the short to medium term, concerning the skills shortage. Initiatives like the government's T level and CITB Construction Skills Fund serve as positive starting points. However, it is now the responsibility of companies to drive their own programs, such as Colliers' Emerging Talent, to address these challenges.

The industry must adopt a cohesive and collaborative approach to: Attract skilled workers already working elsewhere in the industry

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The changing demographic within the UK has resulted in a situation where, for the first time, there are more people of pensionable age than there are children under the age of 16. This, coupled with the aging workforce in the construction industry, both within the contracting and consultancy markets, means that it is an alarming time for the industry. Satisfying labour workforces and recruitment demands has become a very real and pertinent issue for both contractors and consultancies.

These are the numbers that the UK construction industry is faced with currently.

Recruiting people into the industry is not a new challenge, but the changing demographic of the country is exacerbating the problem, requiring immediate attention. ​

Challenges caused by the construction skills shortage

It is essential to view these challenges within the broader context of the changing modern world, including increased flexible working, EU worker policy, the implementation of modern construction methods, and the efficiencies being driven through these technologies.

However, in the short to medium term, the aging workforce is straining the labour supply, leading to increasing labour costs. Wages have risen by six per cent due to a shortage of skilled tradespeople.

This is putting upward pressure on outturn construction costs as clients and developers strive to make their schemes viable. ​ Contractors are grappling with inflation, supply chain disruption, and a diminishing supply of workers to choose from as costs increase. Some contractors have even been forced to cease trading due to these challenges. All this has been too much for some contractors and we have seen some notable companies cease trading.

In terms of growth, the UK will look to construction to kickstart the economy in Q3 2023 and beyond. However, the drain of resources will put sustained growth at risk and make it difficult to meet the aforementioned numbers over the next few years. ​

Construction has historically leaned on workers from the European Union to satisfy this demand but according to the ONS, between 2017 and 2020 there was a 42 per cent decline in the number of EU workers, compared to just a four per cent drop from that of UK workers.

It remains to be seen what the effect of the ‘Back to Work’ budget will have on the industry after the government has relaxed migration requirements for key workers and whether this will mitigate some of this decline.

 

What are some of the schemes trying to help?

The government is trying to do its bit by the introduction of schemes to flood the younger end of the industry with the next generation. One such initiative is the introduction of the T Level in construction. This new technical qualification can be pursued after GCSEs and is the equivalent of three A Levels. Schemes like this can be used in collaboration with companies to meet their resourcing requirements and prepare the apprentices for the workplace. The courses are two years long and include nine weeks minimum working with an employer as an industry placement.

Although similar to apprenticeships, T levels will be more classroom-based, and give young people a route to academic achievement in a technical role.

In addition to the T level, there is the Construction Skills Fund, funded by the CITB, which aims to set up training hubs across the country. The funding supports live projects, providing to onsite experience to nearly 20,000 participants. Major contractors Wilmott Dixon, Balfour Beatty, and Morgan Sindall are just some of the major players in this scheme and have directly hired individuals for various roles.

Opportunities to help mitigate the skills shortage ​

The skills shortage is also impacting the consultancy section of the industry. There is still a large proportion of the workforce that is aging, and the industry needs to do more to attract young talent.

The consultancy workforce has also seen the effects of Brexit and Covid 19; the exodus of EU workers and ‘big resignation’ of the older workforce after the pandemic. This is compounded by the globalisation of the construction industry and the attractiveness of international markets such as Australia, New Zealand, and USA in drawing talent away from UK consultants.

To address this, the Colliers Bristol Project & Building Consultancy team are actively contributing to rebalancing the scales by having more than 25 per cent ​ of the team composed of apprentices. Two of them are pursuing their education at the University College of Estate Management, while the other two are enrolled in the local University of the West of England. ​

Additionally, there are a further two apprentices within the Bristol office that are part of the larger Colliers Emerging Talent programme. ​

Applicants are being encouraged for the next intake and applications will open in autumn 2024.

In conclusion, there is a growing recognition within the industry of the challenges we currently face, particularly in the short to medium term, concerning the skills shortage. Initiatives like the government's T level and CITB Construction Skills Fund serve as positive starting points. However, it is now the responsibility of companies to drive their own programs, such as Colliers' Emerging Talent, to address these challenges.

The industry must adopt a cohesive and collaborative approach to:

Attract skilled workers​ alreadyworking else where in the industry

Attract people​ back to the industry that have now left

Shortening qualification periods​ through intense training​ to meet demand quicker

Improving​ the retention of staff​ within the industry

Striving to increase productivity​ through innovation​

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Alex Vacher​
Director
Cost Management alex.vacher@colliers.com

Alex is ​ Director and Chartered Quantity Surveyor with over 10 years of industry experience in Cost Management and Quantity Surveying.

Alex is passionate about delivering excellent commercial advice for our clients for them to obtain best value. His focus is on how he can apply commercial acumen to add value for our clients through all stages of the project.

As the head of the Cost Management team at our Bristol office, Alex assumes the responsibility of leading a highly skilled and dedicated team, ensuring the delivery of outstanding results for our esteemed clientele.

 

Alex Vacher​
Director | Cost Management

Alex is ​ director and Chartered Quantity Surveyor with over 10 years of industry experience in Cost Management and Quantity Surveying.

Alex is passionate about delivering excellent commercial advice for our clients for them to obtain best value. His focus is on how he can apply commercial acumen to add value for our clients through all stages of the project.

As the head of the Cost Management team at our Bristol office, Alex assumes the responsibility of leading a highly skilled and dedicated team, ensuring the delivery of outstanding results for our esteemed clientele.