The possible impacts of ‘Brexit’ on tourism

The possible impacts of ‘Brexit’ on tourism

We all have our own opinions about the decision taken by the United Kingdom to leave the European Union, the so-called ‘Brexit’. It’s not our place to make any type of judgment on this matter, but to debate the possible impacts of this decision and try and foresee any possible conflicts.

Will ‘Brexit’ lead to changes in tourist activity on a global level? The reply is: very probably, but not in the short-term. For the time being no legislation will be modified since the Lisbon Treaty is still in force; this is the agreement that determines that there will be a transition period of at least two years, starting as from the date a country declares its intention to leave.

In other words, the most noticeable results will be felt in a few years’ time, when the agreements that are today common to all countries in the EU start being rewritten. This uncertainty, however, enables bets to be made with regard to possible changes, since many of these regulations have a direct impact on tourism.

The conclusions of a survey1 carried out by the Association of British Travel Agents (ABTA) in a partnership with Deloitte’s point to a probable reduction in foreign tourists in the United Kingdom, since the other nations in the European Union are the UK’s biggest market.

A forecast2 by Euromonitor International reveals that 34 million visitors are likely to enter the United Kingdom in 2016, 64% of them coming from Europe. Allied to an unequalled tourist supply, the ease with which EU citizens can enter and leave countries in the EU is one of the main factors that contributes to this result.

But a probable restriction on free movement may also have an impact on the arrival of Brazilian visitors who have a noted preference for combining more than one European country in their holiday itineraries, and if the United Kingdom imposes very specific customs rules, they might go to other destinations.

Business tourism may also be affected, according to the survey carried out by Euromonitor. The institute points out that leaving the European Union may result in an exodus of global corporations that are based in London. This is likely to harm the corporate market, which today accounts for some 20% of the visitors and 30% of the annual spending in the capital.

Financial impacts

The devaluation of the pound sterling relative to the North American dollar may make the destination more attractive to global visitors, but will consequently reduce the flow of people from the United Kingdom traveling abroad. A rise in value leads to a contrary movement.

Regardless of the quotation of the currency, possible increases in travel package costs, caused by the eventual introduction of new taxes and charges that would lead to a chain reaction resulting in an increase in prices between suppliers and service intermediaries, may also mean that tourists turn their eyes away from this region. In other words, agencies that have these destinations at the top of their sales’ performance charts should be alert to this possible change in scenario.

Another financial consequence indicated is the possibility of an increase in air fares. “It’s not my function to tell people how to vote, but it’s very possible that Brexit will result in a more restrictive aviation environment, which means fewer flights between the United Kingdom and Europe and, therefore, less competition between airlines and higher fares”, said Stelios Haji-Ioannou, founder of EasyJet, before the result of the referendum was disclosed.

In short, everything points to the fact that the post-Brexit world will mean that travel to the United Kingdom will be more expensive and more bureaucratic. But let’s agree that the mix of natural and cultural beauty and the unique history of these countries will always be worth the investment.

The full texts of these surveys can be found at:

1. ABTA/Deloitte:

2. Euromonitor International:

Camila Lucchesi, editor of Brasilturis Jornal

Camila has a degree in Social Communication and a license in journalism from the Júlio de Mesquita Filho Paulista State University (Unesp), and experience in producing and editing journalistic content since 1997. She has been working with publications and companies in the tourist sector since 2005.

The opinions expressed in this text are the author’s opinion and do not necessarily reflect the position of WTM Latin America.

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WTM Latin America is the three day must-attend business-to-business (B2B) event which brings the world to Latin America and promotes Latin America to the world.

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