Britain’s EU exit creates opportunity and uncertainty

A falling pound means Americans will pay less for a U.K. vacation. Pictured, Land's End, a big tourism draw in England.
A falling pound means Americans will pay less for a U.K. vacation. Pictured, Land's End, a big tourism draw in England. Photo Credit: Shutterstock

It’s too early to tell exactly how Britain’s vote to leave the European Union will affect the travel industry over the long term, but right now is a great time for Americans to visit the U.K. because of the plummeting British pound.

Following the vote to leave the EU, the pound plunged to a 31-year low, falling about 10% in a span of a few hours. It’s not good news for British travelers because a weaker pound likely makes their vacations more expensive, but international travelers will pay less for a trip to the U.K.

U.K. specialist Ellen LeCompte, an independent agent with Brownell Travel in Richmond, Va., called it a “terrific opportunity” for American travelers.

“If you can get there, it’s absolutely going to be a great time to go,” she said.

Steve Loucks, chief communications officer with Travel Leaders Group, also said that Britain is enticing.

“If the lower value of the suddenly plummeting British Pound is sustained, the United Kingdom could provide dramatically increased value for Americans traveling there,” he said.

SmartTours, a bargain travel specialist, has never offered an England package. Now the company is seriously considering it.

“SmarTours has sent nearly 200,000 travelers across the globe since 1996, yet we have never had a trip to England. It's one of the great destinations in the world, yet we have always struggled to find a way to offer England in a way that's sensibly priced,” said co-CEO Greg Geronemus. “However, Brexit has changed the equation completely. England will now be dramatically more affordable and we are taking a hard look at offering a new tour to the United Kingdom.”

Collette, a tour operator that has been offering the U.K. for a long time, is already promoting the destination as more affordable.

Said Paula Twidale, executive vice president of Collette, “The dollar will become stronger against the pound and it is a perfect time to travel to the U.K. to take advantage of those savings in restaurants, shops, museums and throughout the tour.”

As for what Brexit might mean over time, Loucks said, “It is simply too soon to tell what exactly will happen.”

“Since we never speculate and only deal in facts — and the experts disagree about the ultimate impact of the Brexit — it will be difficult at this moment to forecast what will occur,” Loucks said.

David Scowsill, president and CEO of the World Travel and Tourism Council, said that challenges likely lie ahead.

“We are entering a period of market uncertainty which will undoubtedly put pressure on travel and tourism businesses. However, we know that our sector is resilient and we expect business and leisure travel to hold up in the face of these challenges,” Scowsill said.

The WTTC emphasized that travel to, from and within the EU and the U.K. should not be affected in the short term.

“The process set out by the Lisbon Treaty allows for a two-year period of negotiation once the U.K. formally states its intention to leave the EU, and this period could even be extended by agreement of all the parties. During this period, the legislation around travel and tourism will remain unchanged,” said the WTTC.

IATA also said there is “considerable uncertainty” surrounding Britain’s EU exit, but the airline association said an economic downturn in the U.K. is likely. IATA forecasted that the number of air passengers from the U.K. could fall 3% to 5% by 2020.

LeCompte speculated that the EU is in peril.

“The European Union is a house of cards that, just like the Soviet Union, is going to collapse a lot faster than people think,” she predicted.

In the long run, LeCompte said a European Union collapse would likely have a “stabilizing effect” on tourism in Europe: countries would have more control over immigration and union disputes, so travelers would face fewer issues like labor strikes, she said.

In the meantime, U.S. travelers to the U.K. won’t experience any big changes.

“Brexit is like a divorce, and just because this morning your husband announced, ‘I’m moving out to another apartment. I’m filing for divorce,’ doesn’t mean you’re divorced,” LeCompte said. “You’ve got a whole legal process to go through.”

The “kids” in Britain’s divorce from the European Union would be the labor force, LeCompte said, and the Brexit could have a big effect on staffing for travel and hospitality companies. Many workers in restaurants and hotels are European but not British, which could make getting work permits more complicated, she said.

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