The UK’s decision to leave the European Union (EU) could have a very similar impact on the tourism industry to that of the 2008 financial crisis, with more people opting for a staycation instead of travel abroad.
In the wake of the narrow win for the leave camp – 51.9 per cent to 48.1 per cent – the value of the pound plummeted, at one point hitting US$1.3236 – the lowest numbers since 1985. The euro also suffered, marking its biggest one-day fall since the currency’s inception with a 3.3 per cent drop.
Speaking to
Leisure Opportunities, Kurt Janson, director of the Tourism Alliance, said that as seen in 2008 domestic tourism will likely rise, with both inbound and outbound tourism also affected.
“Domestic tourism will increase due to the fall in sterling combining with people’s uncertainty and concerns regarding the UK economy and their employment status. Conversely, the outbound industry will struggle for the same reasons,” said Janson. “Meanwhile the inbound tourism industry will benefit from the fall in sterling and possibly the significant coverage the UK is receiving in the overseas media. So, bottom line, expect ‘Staycation 2’, at least in the short-term.”
With the whole leisure industry now having to deal with the reality of an EU exit, Janson said that despite many not being in favour of the move, there were some positives to draw out of the result.
“While there are many potential disadvantages from being outside the EU, not least with foreign investment and tourism businesses having less access to the skilled workers they need, there are some advantages,” he said. “For example, there is the opportunity to resolve significant issues such as the Package Travel Directive and the Tour Operators Margin Scheme in a way that makes the UK tourism industry more competitive than it’s European counterparts.”
In terms of next steps, Janson urged the government to put tourism at the forefront of negotiations with the EU when negotiating the UK exit so as to maintain many of the benefits currently enjoyed by the UK and the rest of Europe.
“One of the problems in determining the impact of leaving the EU on the UK tourism industry is that the impact is highly dependent upon the deal that is negotiated on the UK’s future relationship with the EU,” he said. “It is therefore important that tourism is included in the negotiation process to ensure that as many of the current benefits as possible that facilitate travel between the UK and the rest of Europe are retained.”
