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How will Brexit affect the UK tourism Industry?

So far, we have held a referendum on whether to leave the EU. Those who took part voted by a 4% majority to leave, that is where we are now. According to the government, Article 50 will be triggered in March 2017 and negotiations to sever EU membership will take about two years to complete. After the Brexit vote, what are the short and longer term prospects for the UK tourism industry?

Short Term Tourist Prospects:

Through 2016, the industry has seen a large increase in tourists, both Brits choosing to holiday at home and an increased numbers of foreign visitors, over 60% of them from other European countries.

The drop in the value of the pound has also had a large bearing on the increase in visitor numbers from America, China and other countries; while at the same time the fall in the pound persuaded many Brits to stay at home. But that’s not the only reason. The terrorist acts in other favourite holiday destinations also persuaded many not to holiday in 2016, or choose relatively safer destinations, the UK being a favourite.

High Occupancy Levels:

With the increase in visitors, accommodation providers across all quarters and levels have seen occupancy rates in the 80-90% and above. With the probability of the pound dropping further once Brexit negotiations begin in earnest, 2017 should continue to attract foreign visitors looking for quality, value for money holidays in Britain. At the same time, many self-catering accommodation providers believe more residents may choose to stay at home and explore the countryside of England, Wales and Scotland.

Long Term Tourist Prospects:

2017 should see the industry remaining buoyant. After that things are, to a greater or lesser extent, in the laps of the gods. On the positive side, unless the United Kingdom achieves the Brexit conditions it wants, which seems highly unlikely, the pound will remain low, ensuring visiting the British Isles remains an attractive proposition.

On the negative side, the possibility of visas being reintroduced by both sides, the time taken to secure them and clear customs on arrival, may well decide European residents to choose other European destinations as an alternative to the United Kingdom.

Although it seems unlikely, should negotiations become toxic, there is the possibility that both sides may decide to send foreign workers home. In the UK tourism industry, that means over 40% of its workforce will have to be replaced. Other areas of the British Isles which presently receive EU grants to help regenerate their tourist industry are likely to be the hardest hit. Once we leave, grants will stop and there is little likelihood the government will step in to help.

Having almost collapsed with the advent of the cheap package holiday in the 1970s, a leaner, meaner British tourism industry developed. Focussing on other areas rather than sun and sand, it developed in other ways to attract that much needed foreign revenue. Whatever the outcome of the negotiations, we believe with hard work and forward thinking, the British tourist industry will survive.

Do you feel optimistic about leaving the EU?

Are you prepared for industry changes or has your travel business already been affected by the vote?  We would love to hear about your experiences since the vote send us a message or call us on +44 (0)1380 819474.

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