A ‘Brexit’ could result in a weaker pound

As Britain heads to the polls on Thursday to vote on whether to leave the European Union (a ‘Brexit’ as it has been called in the media), the most immediate concern for U.S. travelers is the vote’s impact on the British pound.

“The only thing that matters at the moment in terms of what is going to affect the travel industry in Europe is currency,” said Tom Jenkins, CEO of the European Tour Operators Association (ETOA). “If there is a vote to leave, then I think people would expect the pound to drop. If there is a vote to stay in, people are anticipating the pound to go up.”

A weaker pound against the dollar could stimulate demand, enabling U.S. travelers to get more for their money.

If Britain does vote to leave the EU, the impact on travel, trade and other regulations that are currently in place could take several years to sort out, according to a recent report published by the Association of British Travel Agents (ABTA) together with Deloitte.

The ABTA noted that tourism and travel between the U.K. and the EU has been facilitated by the free movement of goods, services, investments and people throughout the EU, and that a Brexit could jeopardize that free movement. For instance, the association noted that the travel sector employs a significant number of immigrants and that any changes limiting the sector’s ability to recruit or employ foreign nationals, including those from the EU, could be a challenge for many British travel businesses.

As for how the Brexit publicity has impacted travel to the U.K. from the U.S., operators reported that it hasn’t influenced bookings.

“To date we have not seen a shift in the pattern of guest bookings. Britain in particular remains one of our top-selling destinations with a broad appeal to international travelers, especially with Her Majesty’s 90th birthday and the continued interest in the royal family,” said Trafalgar CEO Gavin Tollman.

He noted that the pending referendum has produced an air of uncertainty in the company’s U.K. office, which is a mix of British and European employees. Should the U.K. leave the EU, there could be a logistical impact.

“From a global economic and travel industry perspective, I personally hope that they remain part of the EU,” Tollman said.

Vanessa Parrish, channel marketing manager for the Globus family of brands, also reported that travel to the U.K. hasn’t been affected by Brexit news.

“Britain is one of our most popular destinations for the Globus, Cosmos and Monograms brands,” Parrish said. “The June 23 vote is an important one, and time will tell, but presently we do not foresee any immediate implications for our business and think both the U.K. and Ireland will continue to be very strong destinations for us in 2017.”

Collette, too, said that transatlantic travel to the U.K. is “business as usual.” However, the referendum hype has affected British vacationers (Collette also serves outbound travelers from the U.K.).

“There is such a large amount of speculation around the campaign and the outcome of the decision. Our U.K. team has experienced a lot of consumer uncertainty over the last few months, which has been fueled by this referendum,” said Michelle Laverick, Collette’s head of marketing in the U.K. “It seems that many decisions have been put on hold until the result. We’re hopeful that that everything will become clear over the next few days and that business will boom once it does.”

Source: travelweekly.com