While there is no agreed plan for the Brexit procedure it is hard to predict the exact impact, but The International Society of Hospitality Consultants (ISHC) has collected views from members. As experts in the hospitality sector they have considered the likely effect, right now and in the long term, on holiday bookings, hotel development and investment as well as bigger picture repercussions on national and international economic stability.
Immediate effects
“The immediate effects are and will increasingly be cancellations of booked but unpaid holidays by UK citizens and a lower volume of last minute bookings from UK citizens. In the midterm, until Brexit procedures are clear and currency stabilise, we could see a reduction of UK trips abroad and lower spending, which should lead tourism destinations, hotels and resorts to look for substitute clients to cover UK clients’ reduction. There was a similar situation last year with Russian tourists and several years ago when Germany went through a minor internal economic crisis of minor growth.”
Christophe de Bruyn, director of tourism and leisure Indra Business Consulting
Short and longer term impact
“In the short term, devaluation of the BPD makes the UK more attractive to tourists and shoppers, especially from the US. The devaluation of the Euro against US$ makes EU destinations more attractive to tourists from outside the EU. Tourists from UK could be less in destinations like Spain, Greece depending if people cancel their trips because they are facing reduction of value of BPD or reductions of their incomes in the near future. For me, most importantly, investments into new hotel developments or renovations may be put on hold because of uncertainty; we still have a lot of projects on hold because of the latest crises.”
Herbert Mascha, managing partner of MRP Hotels
“Considering long term implications, one has to think what will be the impact of Brexit on the EU (and the world at large), not just Britain. Should the EU dissolve (fully or partially) by similar –exit referendums in other countries as well, we will be living in a completely different world and it is anybody’s guess what it will look like. My guess is that it will be much more uncertain and much more autocratic. In this sense the impact of Brexit may be more important outside Britain than inside the country.”
Gregor FamiraPartner at CMS Reich-Rohrwig Hainz and ISHC Member
The view from Ireland
“No other country will be affected more that the Republic of Ireland as a result of Brexit, which accounts for more than 50% of all exports to the UK. Over 43% of inbound visitor arrivals to the Republic emanate from the UK and it is estimated that the Republic’s GDP could be impacted by up to 2% when, and if the UK separates from the UK. On the positive side, as the only English speaking and Euro denominated country in the EU, Ireland stands to gain greater FDI as a beachhead into the EU that may see City of London financial services relocate to Dublin, attracted by a more benign 12.5% corporation tax.”
Weldon Mather, founder and director of WM Consultancy Ltd
Tourism from the UK to Greece
“We did some analysis for inbound tourism from the UK to Greece and the euro/pound exchange plays a crucial role, while the level of UK GDP measured in pounds is less important. Our analysis has shown that the average spend, in UKP terms, is remarkably stable. If you add to this the uncertainty surrounding the British economy at the moment and the fact that many Britons book their holidays at a maximum 2 months before departure, we expect a significant negative impact this year.”
Aris Ikkos, ISHC research director of INSETE
