If the UK crashes out of the European Union without a trade agreement, millions of Brits will stay at home and not book overseas holidays, according to research released at World Travel Market London today.
A major report by travel research specialist Euromonitor International predicts that a ‘no-deal’ Brexit scenario next March would hit the outbound leisure travel market badly – and any benefits for the inbound sector would be very minor.
Caroline Bremner, Head of Travel and Tourism Research at Euromonitor International, said UK consumers’ economic confidence has declined during 2018 and does not look likely to recover in the coming year.
“A ‘no-deal Brexit’ is forecast to result in five million fewer outbound departures in 2022 than would have been the case under the baseline scenario,” she said.
“With the UK economy in a state of flux, and a decline in the value of sterling, departures would stagnate in 2018 and 2019.”
She predicted a ‘no-deal’ scenario would see the pound fall by about 10%, on top of a decline in 2018, which had seen the currency drop to its lowest level in a year by the end of August.
The falling value of sterling will make the UK more attractive to overseas visitors, but Bremner warned: “Any ‘no-deal Brexit bounce’ is only forecast to add 2.3% more arrivals in 2022 than under the baseline scenario.
“The USA would be the source market contributing the most under this scenario but with fewer than 100,000 additional arrivals.”
Furthermore, the fallout from a no-deal scenario would be felt worldwide, said Bremner.
She pointed in particular to Spain, where UK travellers account for 21% of inbound revenues.
“Brexit could reduce 2019 receipts by US$747 million, compared to a delayed free trade agreement, which subsequently results in a US$66 million reduction in outbound expenditure from Spain,” she said.
Meanwhile, a poll of 1,025 British holidaymakers by World Travel Market showed that 58% would consider an alternative destination if they have to pay for a Schengen visa post Brexit.
World Travel Market London’s Paul Nelson said: “With less than five months until the UK leaves the EU, there is still huge uncertainty about what the future holds with many commentators think the likelihood of a ‘no-deal’ Brexit is increasing.
“It’s against this precarious backdrop that we hope to help the UK and global travel industry understand the potential impact of different scenarios so that they can plan for various eventualities.
“Brexit has been woven into the fabric of most of our debates and sessions at World Travel Market London because it is the key challenge that our delegates have to grapple with.
“There were 46.6 million holiday visits abroad by UK residents in 2017 – if there’s no deal in the negotiations, and the market does indeed drop by five million in 2022, that would represent a fall of about 10%.”