While the UK will officially leave the EU after years of wrangling on January 31st, in many ways this will only be the beginning of Brexit. This means that the prospect of no-deal remains on the table, and could become a reality should the UK fail to agree on a viable trade deal by December 31st.
This remains a frightening prospect for brands in the travel and tourism sector in the UK, who could see demand fall and a number of logistical issues ensue should Brexit unfold in a disorderly manner.
We’ll explore these issues below while asking how the nation’s travel and tourism sector is likely to fare against the backdrop of Brexit.
Exploring a No-Deal and the Impact on Travel
In the event of an orderly Brexit (and the transition period that will continue until the end of 2020), the travel and tourism sector will be largely unaffected.
This is because the UK residents will retain the freedom of movement during the aforementioned transition period, while an orderly Brexit will also mean that cross-border travel and trade will continue accordingly the terms of a new treaty.
The same cannot be said for a no-deal Brexit, however, which has the potential to cause huge travel delays, the cancellation of flights and increase the cost of visiting EU member states as members of a so-called ‘third country’.
In this scenario, for example, the Freedom of Movement rules for EU citizens will no longer apply to Brits over an extended period of time.
So, although UK citizens will be able to enjoy visa-free travel to the Schengen area for a short stay (up to 90 days) under the terms of Boris Johnson’s withdrawal agreement, this may not apply in the event of a no-deal.
A replacement system would also have to be agreed with the EU after the Brexit negotiations, and until this is achieved we’d most likely see new border restrictions imposed and considerable delays at English Channel ports and airport lounges.
The Issue of Cost and Unfavorable Exchange Rates for UK Citizens
These concerns are more than valid, especially when you consider the likeliness of a no-deal Brexit and the sheer size of the travel and tourism sector in the UK.
In terms of the latter, this marketplace is expected to be worth more than £257 billion by 2025, while it already accounts for just under 10% of UK GDP and supports well in excess of three million jobs.
It’s also thought that the value of the pound will plunge post-Brexit, both against the U.S. Dollar and the Euro. In fact, a no-deal Brexit could see the pound sink to the similar lows experienced after the EU referendum vote in June 2016, and following Theresa May’s now infamous Mansion House speech (which spoke positively about a hard Brexit deal).
A weak pound will impact people traveling to anywhere in the UK, as it will contribute to unfavorable exchange rates and cost more to purchase stores of the U.S. Dollar and the Euro. These exchange rates are recorded and analyzed daily by brokerage sites like Oanda, providing an insight into the relative performance of the pound in real-time.
This issue may arguably be the most concerning to British travelers, who may be willing to endure some travel delays so long as the value of the pound doesn’t depreciate too sharply.
The issues with the security lines
The long queues in the UK airport are observed. But, the reason behind it is not just a tourist arrival. The Brexit process is yet to be completed in the fast track. Once it is done it is believed to have hassle-free security check-in queues at the airport. But, the British passport holder has to be in the same line where the non-UK passport holders are standing.
According to the president of the consumer advocacy group travelers United- Charlie Leocha, “ Entering inside the UK and exit will be just like a horror show as soon as the Brexit process is completed.”
The authority has realized the difficulty that is yet to take place in the coming days. The BBC reports, the government of Britain has waved off the necessity of Visa for the visitors traveling from any of the European countries. According to the latest source of reliable information, visa-free travel is allowed for the individuals’ travelers of 56 countries.
Impact of Brexit on hotel
The hotel industry to has an effect on the Brexit process. Yes, the demand for hotel rooms has increased as the Visa for the transit of all European countries has become free. Thus, the price rose to an upward direction. According to the survey report on hotel rates, the first quarter has experienced as high as £133.38 as the average cost of a hotel room. It is also observed that the EU citizen has full freedom to work and live in the UK without a permit. Also, if an individual from the EU wishes to work in the UK can easily go ahead with it without any restrictions. But, the employers willing to employ the EU applicant need to sponsor them.
The greatest impact on the hospitality industry
The turnover or the revenue from the hospitality industry mostly depends upon the Europeans. Along with the incoming guests or passengers, the staff or workers are equally important to be a part of the hospitality industry. They are sourced from the ex-communist states. These are the places where cheaper labor is available for work. There is a chance of making 3 million workers in the hospitality industry. This is the assumption of the KPMG report.
As per the current situation, the impact which is likely to occur for the countries that withdraw from supranational unions such as the Association of southeastern Asian nationals (ASEAN), the European Union (EU) came across the growing attention. There was a potential negative impact of the supranational unions. There is an intensification of the UK tourism business with the Brexit immigration rules. This had shortages with the workforce. Also, the tourism industry will struggle with the recruitment of staff post Brexit.