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Today Theresa May, the British prime minister, is expected to kickstart the formal process for the United Kingdom’s divorce from the European Union. There is a legal two-year deadline for talks to resolve in a plan. Other than that, much is uncertain.
Ever since the UK voted on June 23, 2016 to leave the EU, Skift has been covering the risks that the divorce poses to the travel industry. Skift has published original analysis from our Europe editor Patrick Whyte and selections of the best stories from Bloomberg and Reuters.
If we could only recommend one story to read, it would be What the UK Prime Minister’s Latest Brexit Speech Means for the Travel Industry.
While that story was based on Prime Minister May’s January 17 speech on the topic, the analysis still stands. Her policy hasn’t changed much since. In brief, May thinks Britain can leave the single market but retain most of the attributes of EU membership without making many concessions.
The bravado of this rhetoric might be helpful brinksmanship for negotiating.
But in the eyes of the travel industry, the strategy ignores prosaic realities. Ministers and officials need to be more honest about what negotiations can accomplish and make plans accordingly. Our headline on this think piece says it all: The UK’s Brexit Strategy Should Terrify the Travel Industry (But It Doesn’t).
Many companies in the UK and overseas companies that invest in or have operations in the UK have warned officials about their concern about the effect Brexit may have on their businesses. Virgin Atlantic already blames a loss on Brexit-related problems.
A case in point: Flights among EU nations are regulated by the Single European Sky treaty. Britain will probably have to negotiate a new deal, and carriers flying in and out of the country will likely need new operating licenses. For example, Ryanair has threatened to stop flying UK domestic routes.
Reaching a deal on these complicated talks before the two-year deadline is vital. Industry analysts predict that at least a patchwork compromise needs to be settled within one year from now to allow all the industry players to make adjustments. Officials from industry and political stakeholders have yet to put forward a clear plan to provide legal certainty on the day after Brexit.
If Scotland’s first minister, Nicola Sturgeon, is successful in calling for an independence referendum, it may cast further uncertainty on the process.
That means destination marketers making long-range plans need to keep an eye on developments. Many leaders in the industry and politics may feel tempted to put a positive spin on an event that risks a bumpy road for the travel industry so as not to add to concerns and make tour groups, convention organizers, and others more nervous than necessary.
But the peril of underplaying the risks is that some professionals may be caught unprepared. A case study for how complicated Brexit could be is Gibraltar.
In positive news, the drop in the value of Britain’s currency against the dollar, the euro, the renminbi, and some other currencies has made Britain a more attractive place to visit for foreign tourists. It’s risky to speculate on currency trends, but the industry is hopeful that the buying power of inbound tourists will help smooth out any possible bumps.
That said, taken as a whole, official data showed no boost to Britain’s tourism industry during the three months after June 23’s referendum, usually peak season — though that partly reflects long-term vacation planning.
Visit Britain, the national destination marketing organization, needs to play its cards right and collaborate more closely with its convention industry partners. Early signs have been positive, such as with a campaign aimed at American travelers, but the verdict is still out.
Northern Irish tourism is also imperiled. The British prime minister wants to keep the common travel area between the Republic of Ireland and Northern Ireland, but ministers on all sides have a lot of other issues on their plates.
It is in the travel industry’s interest that Brexit talks succeed on time. The first face-to-face talks are due in early summer.