The UK is leaving the European Union in a few weeks and that is causing no small amount of anxiety for travelers, expats and of course those in boardrooms.
In fact, "Brexit will have a significant consequence and is expected to have a severe impact on travel and tourism," said Martin Meissner, partner at Reed Smith LLP, speaking at the ITB in Berlin this week. "And the withdrawal agreement not signed yet."
He said that about 80 percent of all northern Atlantic air traffic passes through the UK, and that in 2017, about 160 million passengers traveled between the EU and the UK.
"Tourism is the 5th largest export sector of the UK," he added. "Despite a transition period, we can't foresee every consequence…Uncertainty and risk governs everything, even in an ideal (scenario)."
But will the sky really fall? No of course not, say experts. Still, that doesn't mean there won't be negative impacts.
Caroline Bremner, chief of travel research at Euromonitor International, says it is the uncertainty for business and consumers that is so tricky – something that has been ongoing since the rocky path to the UK's exit began with the Brexit referendum three years ago.
"Basically, if there is a no-deal Brexit, then what will happen is prices are going to rise – food, travel and equally what we have is the uncertainty around the negotiations," she said, speaking at the ITB in Berlin this week. "I am seeing it play out with somewhat of a sense of disbelief. It's bad for business, bad for consumers."
"It feels like we feel like are on a cliff's edge," she added.
So far, she noted that consumer confidence in the UK is trending downward along with business confidence, and that is and will have a negative impact on the UK's GDP: Expect it to drop 3 percent over next five years, she said, noting the UK's already stagnating economy.
One of the main impacts has been on the British pound's valuation: It plummeted after the vote, and has not complete returned to pre-2016 levels, she added. It could lose another 10 percent.
Still the upside is that even though British outbound travel will fall, especially to countries like Spain, "for the rest of world, means that UK will be affordable."
Christoph Debus, Chief Airlines Officer Thomas Cook Group, meanwhile, says he expects a significant impact on air travel.
Brexit has been causing significant uncertainty over issues such as what nationality do the carriers become, and over landing privileges.
"We should not underestimate the impact on air traffic," he said. "We have transition agreement but there is a lot of work still left to be done."
"I don't have sleepless nights right now," he added. "But to sit here on the 6th of March and not know what is coming in a few weeks – well, that's something. Regardless, the bill will be paid by the consumers."
Photo: Eros Banaj
This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted. Jabeen Bhatti is reporting exclusively for 4Hoteliers.com at ITB Berlin 2019 - www.4Hoteliers.com/itb.
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