What the Brexit Vote Means for the Global Tourism Industry
Skift Take
Suffice it to say, everyone surprised by the outcome of the Brexit vote probably wishes they’d paid more attention to it than they did. Nevertheless, we probably won’t feel the immediate impacts of the UK’s exit until at least two years from now.
Shock. That’s the best word that encapsulates not just how the global tourism industry feels, but the global community at large, given the news that British voters have essentially voted themselves out of the European Union (EU) after more than four decades of European membership.
“There was a lot of shock, to be honest,” said Stephen Dunk, European operations director and global sales coordinator for Travelzoo, who is based in London. "It was pretty close. I was not expecting it to go quite the way that it did.”
The vote was 17,410,742 (51.9%) of UK residents who voted to leave the EU, while 16,141,241 (48.1%) voted to remain. This decision, needless to say, won’t just impact travel or tourism, but a variety of industries, especially finance. And given the immediacy of what’s just happened, it’s still too early to say exactly what kind of impact this will have on the travel and tourism industry.
The UK’s eventual exit from the EU, dubbed “Brexit,” is a process that is expected to take place over the course of two years or perhaps even longer, so any immediate impacts being felt at the moment — including a rapidly falling British currency — are still premature.
Immediate Impacts
“The thing that I think is being lost in the impact on the stocks today, is that there is a going to be a very gradual, multi-year transition for the UK out of the EU,” said Mike Olson, senior equity research analyst at Piper Jaffray. “There’s unlikely to be any sort of imminent shock to the system that is going to result in a significant decline in consumer sentiment [regarding travel to the UK or the EU overall].”
Olson, who regularly analyzes the big online travel agency companies — Expedia, Priceline, and TripAdvisor — said that because all three of these companies have “significant exposure to European travel” (especially Priceline), they’re all probably adjusting their financial outlooks for the rest of the year going forward, but that they probably aren’t overly concerned. However, more than 50% of Priceline’s revenue comes from Europe; 25% for Expedia and 30% for TripAdvisor.
“If there were to be any negative impact on European travel, Priceline would be the most exposed and, not surprisingly it’s the one that’s down the most in the market right now,” Olson noted.
Bottom line: If you’re looking to buy some Priceline, Expedia, or TripAd
