As the Brexit fallout continues, it becomes increasingly clear that the wallets of the country’s travelers will feel the pinch. The British pound tanked on Friday and continued its free fall on Monday against major currencies, hitting a 31-year low against the U.S. dollar.
Britons face a void in leadership, Scotland is making loud noises about a move to independence, and there are suggestions Northern Ireland may follow suit, so consumer confidence is shaky at best.
In a divorce process that is expected to roll out over at least two years under Article 50 of the Lisbon Treaty, questions arise on the outlook for consumer travel and tourism. Here are the possible implications:
For American travelers, Brexit’s silver lining is that a vacation in the U.K. just got a good deal cheaper. The pound’s 11% fall against the U.S. dollar may not yet be at the bottom as the currency continues to weaken. “So far, in terms of sterling to dollar, we’ve seen half the decline we’re likely to see this year,” Steven Barrow, G-10 strategist at Standard Bank Group Ltd. in London, said on Sunday. Before the vote on June 23, Britain’s biggest bank, HSBC, predicted it could fall to $1.15.
Some Brits are now anxious about the ease and cost of moving around on the continent, but supported Leave because of concerns over regulation. Ski enthusiast and Leave supporter Oliver Lawrence, 26, says, “I will miss how easy it was to Interrail in Europe, but I studied EU law and am shocked by how much regulation they’ve imposed.” This is exactly the kind of concern that the leaders of the Leave movement appealed to for their emotionally charged campaign.
Other millennials, who comprise an overwhelming pro-Remain demographic, feel they went to sleep on the evening of June 23 in the United Kingdom and awoke to Little England. “Free movement was a core principle of the EU, developed over time. We are no longer part of that,” writes Paul Mason, economics and social justice contributor, in the Guardian.
Leaving the European Union impacts future vacations for those with sterling in their pockets, as a collapsing pound puts a dent in both incomes and euro spending money, Richard Branson points out in a Virgin post.
Brand USA, a U.S. destination-marketing organization, is concerned about inbound tourism from the U.K., the U.S.’s number one source of visitors from overseas. Brexit turmoil is bad news, as it’s harder to attract travelers affected by a weakened currency.
The EU-U.S. Open Skies Agreement allows EU and U.S. airlines to fly between any point in both regions, but with the U.K. out of the EU, there may be more restrictions on air travel both to and from the U.K.
Sir Rocco Forte, one of the best known names in Britain’s luxury hotel industry, backed Brexit. He said in a Daily Express article, “If we went alone it would increase our reputation and clout in the world, not reduce it.”
The official tourist board Visit Britain counted a record 36 million visitors last year. While they declined to comment on Brexit before the vote, figures reveal that 67% of the U.K.’s 2015 visitors were from the EU. These tourists could be subject to new customs rules.
In San Francisco, Jake Steinman, founder and CEO of NAJ Group, says, “The real issue for selling the U.S. will be the endgame of guessing where exchange rates will finally rest without volatility. This is how the trade survived profoundly shocking disruptions of the Gulf War in the ’90s, 9/11, and the Great Recession. A stable exchange rate would at least allow those with resources to adapt.” A cup of tea is needed to mull it over, and we’re going to need a very full kettle.
Laurie Jo Miller Farr, travel writer and consultant, is a dual citizen of the U.K. and U.S. and a hotel and destination marketer. She is also the mother of Fast Company senior writer Christina Farr