Will more of us take holidays in the UK?
On Thursday 23 June the UK voted to leave the European Union. What does this mean for the country’s tourist industry when we consider that two thirds of visitors to the UK and nearly three quarters of business visitors to the UK are from EU Countries.
We have already seen a fall in the value of the pound; it will now buy you fewer Euros or Dollars. When holidaying abroad the cost of accommodation will have risen and spending money will not go as far. If people find foreign holidays significantly more expensive and with more and more of us choosing to book holidays late we may choose to stay and holiday at home in the UK.
On the other side UK holidays will become better value for overseas visitors from EU countries and will perhaps become a more attractive holiday destination.
Both these could result in the UK’s own domestic tourist industry getting a boost. However, it maybe that travellers who decide they are going abroad, even if it costs more, may be less willing or unable to take an additional short break here in the UK.
Where a travel business has taken advance bookings, some up to one year in advance these will be less affected by sudden currency movements and more affected by long term change. These businesses will need to watch the long term currency forecast and plan and adapt the holidays they offer accordingly.
There is also a question mark over just how much the UK’s domestic tourism industry will be hit by a fall in business travellers, always more important for many hotels than leisure visitors.
Hotels tend to need almost twice as many new leisure visitors to make up for business travellers who’ve cancelled because hotels earn a lot more from corporate guests than they do leisure travellers.
If we see a reduction in the corporate travellers due to the political uncertainty the weakening pound will help draw in new business but will it be enough to replace this reduction. Although this is not great news for hotels it may be a good time to get a bargain.