The outlook for the British tourism industry is bleak
Hope among travel firms is currently in short supply
By B.R.
THE one thing we know for certain about the longer-term consequences of last month’s Brexit vote is that we don’t know what all those consequences will be. For the travel industry, that is especially true. Even so, hope is currently in short supply.
Immediately after the referendum, airlines were lumped in with banks and property firms as the shares to sell. IAG, the parent company of British Airways, has lost a third of its value since the results were announced on 24th June. That is only to be expected. It seems certain that outbound travel from Britain will take a hit. As the pound falls and the rest of the world becomes more expensive, and low business confidence causes firms to rein in corporate travel, fewer Brits will go abroad. (And that is before we factor in the unknowns, such as whether British carriers will be able to maintain unfettered access to EU skies.)
The impact of Brexit on the number of people visiting the United Kingdom (if such a thing will still exist) is much less sure. But a gloomy note from Euromonitor, a research firm, suggests that the outlook might be just as bad. Europeans accounted for 73% of travellers to Britain in 2015. But, with Brexit also likely to harm economies across the rest of the continent, Euromonitor is forecasting that by 2020 there will be 5% fewer visitors to Britain compared with if there had not been a vote to leave.
Interestingly, Euromonitor thinks visitors numbers from France, the largest source of Britain's tourists, will hold up. French tourists proved more resilient than most during the recession that followed the financial crisis of 2008. Instead, it is the Americans and Germans who will prove most flaky. Each will send around 500,000 fewer travellers to Britain compared with what would otherwise have been expected, according to the forecast.
That outlook might be overly pessimistic. The collapse in the pound will make Britain cheaper for overseas visitors. Americans in particular, who are among the highest-spending tourists in Britain, are likely to feel the benefit. And regardless of the type of visa deal struck between Britain and the rest of Europe, they are already used to standing in long immigration queues at British airports, watching those from France and Germany swan through the EU channel. Moreover, if fewer Europeans also want to travel to America, it may well mean that the cost of transatlantic flights will fall.
Perhaps the optimists are grasping at straws. Those British firms that rely on foreign visitors will no doubt be feeling nervous. Still, tourist offices might want to consider ditching their English/German phrasebooks and ordering some British/American ones instead.
