The 'out' vote could hit British outbound travel to European destinations but boost inbound travel to the UK from continental Europe, experts predict, while airlines are facing turbulent times.
Last Thursday’s dramatic vote by Britons to leave the European Union, causing a severe slump in the value of the British pound against the euro and the US dollar, looks set to impact directly on the travel and tourism industry in the coming months and years. Airlines face uncertainty over their future air traffic rights, while there are pros and cons for the leisure travel sector.
TUI and Thomas Cook were quick to reassure the financial markets that there would be few consequences for their UK business in the short term. Package holiday prices for this summer will not be impacted, and capacity for the coming winter and even summer 2017 has already been largely contracted, they underlined.
If the pound remains weak, this would mean their prices would be lower, for example, than rates on hotel portals used by individual travellers, and thus support their package bookings. The weaker pound would first impact on tour operator prices roughly in a year’s time.
However, British holidaymakers would still have to face higher costs in destinations for restaurants, shopping and other activities. This would put up the overall costs of a foreign holiday and could persuade some to holiday within the UK instead.
At the same, the weaker pound could boost inbound travel to the UK by Europeans who have been put off in the past by the relatively high cost of trips to Britain. Experts believe that EU citizens will be able to visit the UK without needing a visa in future.
TUI CEO Fritz Joussen stated: “The EU without the UK is barely conceivable but we respect the democratic decision of the British people and trust the UK government will take all steps necessary to ensure economic and political stability and to ensure that British holidaymakers will not be affected by the UK´s decision to leave the EU.
“TUI Group has highly professional risk management processes which have taken into consideration all possible scenarios. We are well prepared and confident that TUI Group as a truly global company will not be significantly affected by the decision. It remains to be seen how the decision will affect consumer sentiment.”
Norbert Fiebig, president of the German Travel Association (DRV), representing travel agents and tour operators, described the vote as a blow for Europe and urged politicians to ensure that no new barriers to travel were created. “Hardly any other industry is as global and connected as worldwide tourism. We as providers of travel service and above all consumers depend on and benefit from simple travel conditions and open markets in this world.”
Stefan Schulte, president of the German Aviation Association and CEO of Frankfurt Airport operator Fraport, warned that Brexit would lead to “a significant worsening of air travel between the EU and Great Britain” since a new bilateral UK-EU accord would have to be negotiated.
Easyjet, for example, is apparently now looking at gaining European operating licences in order not to lose EU traffic rights. Ryanair CEO Michael O’Leary said the Irish budget airline would now focus on growing in other EU markets instead of the UK.