Brexit would be a ‘disaster’ for tourism, warn leading travel industry firms

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Costs to customer, including air fares, may increase with Brexit

Three leading travel organisations have said that Britain leaving the EU would be ‘disastrous’ for the tourism industry in an Abta report detailing what a Brexit would mean for UK travel.

Monarch Group, Mediterranean specialist tour operator Esplora, and award-winning Belfast travel agent Knock Travel have expressed serious concerns that a Brexit would lead to increased costs for the customer.

The Association Of British Holidaymakers’s (Abta) report is aimed at businesses as well as the customer. The country will go to the polls on June 23 to have their say on whether Britain should remain in the EU. The ABTA report says

  • There are strong travel and tourism flows between the UK and EU, facilitated by the free movement of goods and services, investment and people across the EU, which could be jeopardised by Brexit.
  • In the event that the UK votes to leave the EU, there is a high likelihood of uncertainty during the negotiation period immediately following the referendum.
  • In the event of a Brexit, the value of sterling could be impacted to the extent that operating from outside the EU would increase costs for the travel industry.
  • In the event of a Brexit it is likely that EU-originating regulations that benefit and protect travelling consumers would need to be replaced with parallel UK-originated regulations to ensure that consumer confidence is maintained.
  • Any changes limiting the sector’s ability to recruit or employ foreign nationals, including those from the EU, could challenge many travel and hospitality businesses in filling a number of roles.
  • The UK travelling consumer could be faced with increased costs if an exit vote led to a sustained deterioration in the value of sterling, making foreign currency destinations more expensive in sterling. Consumers would also need to cover any additional health insurance costs, should the UK exit the European Health Insurance.

The ABTA report gets it economic analysis from Deloitte. Over 29million foreign holidays each year are made by UK holidaymakers to EU countries, equating to 76 per cent of all holidays taken. Additionally, 68 per cent of all business trips from the UK are to EU countries (4.6million business visits).  Blog_ABTA_TWC-560x315

There are currently many EU regulations that have been designed to benefit holidaymakers and business travellers. These include regulations on financial protection for package holidays, compensation for flight delays, access to free health cover through the European Health Insurance Card and caps on mobile phone charges.

Of immediate concern is the impact that a period of prolonged uncertainty will have on the strength of the Pound versus other currencies. A weaker Pound has a direct impact on spending power overseas, making the cost of holidaying or visiting abroad more expensive, as well as adding costs for UK businesses to buy abroad.

Andrew Swaffield, CEO of Monarch Group, believes that a Brexit would inevitably mean higher air fares for those travelling out of the UK.

Doreen McKenzie, owner of Belfast-based travel agent Knock Travel goes one step further and says it would be disastrous if the UK left the EU. She is reported to have said that a prolonged period of uncertainty during any re-negotiation period could take several years.

Damian Croft, founding director of specialist Mediterranean tour operator Esplora, believes this freedom of movement allowed to member citizens should be heralded, and believes a Brexit will make many elements of travel business not viable financially.

The issue of ‘cost to customer’ is one main talking point surrounding the Brexit, and especially in Abta’s report, with the fears that the way we holiday could change forever.

Passengers are currently eligible for financial compensation if a flight departing from an EU airport or arriving in the eurozone with an EU carrier is delayed for a reason within the airline’s control. But that regulation would no longer apply to those flying out of UK airports with airlines such as British Airways, easyJet or Monarch. That could lead to claims for compensation landing in court.