World Travel Market 2016 and Exploring the world of Post-Brexit Travel

World Travel Market 2016 and Exploring the world of Post-Brexit Travel

The world is a fast-changing place, and World Travel Market 2016 helps inspire and prepare the travel sector – from tourism boards to tour operators – to plan, pool resources, and prosper in a time of global uncertainty. This week, Simon Condon, Director in MSLGROUP’s Consumer Division, looks at our travelling future after examining the thoughts, trends and tips coming from East London’s ExCeL.

Since the outcome of the EU referendum in June, everybody from newspaper columnists, to industry experts and armchair critics have been posturing about what Brexit means for the British traveller. Research published earlier this month has shown that consumer confidence has been hit significantly by the vote to leave and the sharp fall in Sterling. The Holiday Confidence Index, carried out on behalf of First Rate Exchange Services in partnership with the Institute of Travel & Tourism revealed consumers are less confident about committing to overseas holidays than at any other time in the past three years.

Of the 5,067 people questioned by YouGov, only 53% were planning to travel in the next 12 months, 2% fewer than last year. The number of people who said they weren’t planning to go abroad rose 2% year on year to 28%.

Brexit was one of the hottest topics at last week’s WTM with many insiders offering their views on how the vote is affecting inbound and outbound travel to the UK, and the impact on UK-based travel businesses or markets which rely on British customers.

A likely slowdown?

“It’s likely to be a disorderly Brexit rather than a hard Brexit,” said Caroline Bremner, Euromonitor’s Head of Travel. She highlighted that no access to Open Skies Agreements and trade deals in the Eurozone will be a challenge and there will be an inevitable decline and slower demand to hubs such as Ireland, which have historically had a huge influx of UK residents.

Or is Brexit good news?

“I think there’s more to be positive about than negative,” asserted Patrick Richards of Cox & Kings; he made the point that value for money is a big selling point for the UK and it’s a great chance for other cities in the UK to attract tourists.

Results from the last quarter’s tax-free shopping confirms that the outlook is not bleak. The weak pound has made Britain’s high streets increasingly attractive to international consumers, with sales up by 45%. This surge in sales has been fuelled by a growing number of visitors particularly from the Middle East, who are now the biggest contributors to tourist spend with growth forecasted. According to the data, Middle Eastern tax-free transactions were up 48% in the last month alone, with Saudi Arabian spend up by over a 100% (http://www.retailgazette.co.uk October 26)

Travel is actually increasing

Chris Mottershead, Managing Director of Thomas Cook, observed that there’s been a significant 4% growth in inbound traffic since Brexit – but that hasn’t meant a boost in people paying for holidays here, as a lot of this rise is people from abroad visiting friends and family in the UK. He noted the effect of Brexit on the hospitality workforce, with 25% of workers from outside the UK, in particular Eastern Europe, and as much as 64% of London’s hospitality staffed by non-UK EU residents.

Money worries

Andrew Swaffield, Chief Executive Officer of Monarch, declared an undeniably negative impact for the airline. “We buy fuel in dollars; pay for air traffic in euros and have incurred 15% increase in costs.”

“It’s unpredictable, so I’d urge all business to plan for all scenarios,” said Terry Williamson, CEO, Jac Travel. “There’s a huge responsibility for the media and to the whole country to convey that we are welcoming and open for business.”

Swaffield echoed this plea to the media and marketers for communications to help make messaging clearer. “Liberalised air travel, European health insurance, visa-free travel – this all matters for inbound and outbound business, and we, as an industry, should explain all off this better.”

The longer-term impact and consequences of Brexit are still unclear, but what is clear is that the UK travel industry needs to be prepared to respond quickly to change and should take full advantage of the drop in Sterling to attract visitors by aggressively communicating our improved value proposition.

Contributors

Portraits_Circular_Simon_Condon

Simon Condon

Deputy Managing Director, Consumer

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