New Delhi: Brexit is an abbreviation of British Exit, which refers to the June 23, 2016 referendum by British voters to exit the European Union. The referendum roiled global markets, including currencies, causing the British pound to fall to its lowest level in decades. The outcome has prompted jubilant celebrations among Eurosceptics around Europe and sent shockwaves through the global economy.
Destination Britain to Get Cheaper
Travel experts predict that, in the short term, travel between Europe and the U.K. is not expected to change, at least until the breakup is formally negotiated over the next two years. There may be hardly any immediate effect on ease of travel, since there are no changes in aspects like visa processes.
It is probably in the next couple of years that any further developments on this front would play out. For those planning a vacation in the future, the exchange rates are expected to provide for 5-7 percent savings in package costs.
However, industry experts are already projecting uplifts for the UK’s inbound business due to a weakening pound and preliminary findings by IATA suggest that international arrivals will increase as a weaker pound has raised the attractiveness and affordability of the UK relative to other destinations. Over the past year, Britain has enjoyed a surge in international visitors, especially from the U.S. and Canada.
“Regardless of whether you believe that Brexit was a positive or negative move for the UK, there will undoubtedly be repercussions for travellers in light of the decision,” said Ross Veitch, CEO and co-founder of Wego. “The UK Pound has dropped 9.8 percent, with the value of the pound to the dollar at 1.3415 in early trading since the referendum result has become clear, which means a UK holiday is going to be cheaper for most foreign tourists than it has been for about 20 years,” Veitch continued.
“In-destination trip costs such as accommodation, dining, entertainment and shopping will allow significantly better value for the foreign traveller after exchanging their local currency,” he added.
BREXIT: Impact on Incentive Travel Business
The Brexit outcome has created a lot of uncertainty and the long-term implications on the incentive travel business are unknown. Members of the Society for Incentive Excellence (SITE) from around the globe share their perspectives on how the decision may impact the industry in the short term.
“It is critical that our industry maintain a keep calm and carry on approach in order to minimise any potential impact on incentive travel programs and other business events,” cautioned Paul Miller, SITE Past President and Managing Director, Spectra DMC headquartered in London. “The democratic process has taken place and should be respected regardless of the outcome and which side of the debate you sat. Britain will work through this and will find a way to work with the EU and vice versa. It’s really business as usual and, in fact we are already seeing an increase in RFPs from both the US and Europe.”
“The UK is a significant source market for many Asian countries and the referendum results have undoubtedly created a level of uncertainty for the Asian region,” commented Rajeev Kohli, SITE President and Joint Managing Director, Creative Travel Pvt. Ltd., New Delhi, India.
He further said “The concerns are the potential shift of outbound British groups away from long haul destinations due to the cost implications brought about by the severe depreciation in the British Pound. There is also the potential impact on suppliers’ bottom line for groups already contracted for the near future. Having said this, we do find that British travellers tend to be very resilient and, after a period of adjustment, we should see a degree of normalcy return.”
SITE board member Jennifer Glynn, Managing Director, Meeting Encore Ltd. in Canada shared a similar perspective. “Brexit brings opportunity for some groups to get better value on their programmes due to the exchange rate and the expected economic downtown. As a result it may increase incentive programs considering UK in the near future.”
