Brexit Could Potentially Benefit UK Tourism but the Chances Are Slim

From airport funding to changes in workplace rules and having a reason to lower visa costs, there are a number of ways Brexit could enhance UK tourism.

In the aftermath of the Brexit referendum, though, a lot of the discussion has centered around the damage leaving the European Union could do to the UK.

Exiting an economic and political union that has been a part of UK life since 1973 is bound to have some negative repercussions.

The supposed benefits – taking back control of the country’s borders and striking new trade deals with fast-growing economies – are harder to quantify because they represent a leap into the unknown.

For the travel and tourism industry uncertainty still surrounds airline flying rights and what will happen to EU migrant workers. The current UK government has signalled that it wants to limit immigration. Tighter border controls will lead to bigger queues unless the UK beefs up its border force.

But what about the potential benefits? In what ways might leaving the EU actually help UK tourism?

Reforming the Common Agricultural Policy

The Common Agricultural Policy is one of the cornerstones of the EU and has been around in various forms since 1962. Farmers in member states receive direct payments, helping to ensure the EU produces enough of its own food.

Currently, Common Agricultural Policy-related direct payments make up 27 percent of the EU’s overall budget, roughly equivalent to $51 billion (€41 billion) a year.

Now, you might be wondering what this has to do with tourism. Well, program also funds some rural tourism activity.

The problem, according to Kurt Janson, director of the Tourism Alliance lobbying group, is that the amount available for tourism under the current agreement is tiny.

Leaving the EU and the Common Agricultural Policy would allow the UK to create its own agricultural policy, which could place more of an emphasis on tourism.

“It probably wouldn’t surprise you to know that for billions of pounds spent on CAP in the UK, only 2 percent of that funding is available for tourism businesses in rural locations, despite tourism businesses in rural locations earning more money than agricultural operations in rural areas and employing more people,” Janson said at a Westminster Media Forum event earlier this week entitled: The UK Tourism Industry Post-Brexit – Skills, Investment and the Industrial Strategy.

Boosting Air Connectivity

The EU’s state aid rules mean that member states are can only use these monies to help their very smallest airports (nothing above 3 million passengers). When the UK leaves the EU, it will in theory be able to subsidize any airport of any size. Airports like Bristol and Leeds Bradford could benefit from the extra investment.

“Once we’re outside the EU the government will be able to pump-prime new routes into the regions to get the regional dispersal the government wants as part of its tourism strategy,” said Jansen.

Eliminating the Working Time Directive

In 1993, the EU brought in a new rule limiting the amount of time employees could work during a given week to an average of 48 hours. The Working Time Directive also offered a number of other protections, including four weeks annual paid leave.

Ever since the referendum, MPs skeptical of the EU’s role in UK life have pushed for the law’s abolition. Tourism industry bosses also see it as a potential opportunity.

According to John McGrillen, CEO of Tourism Northern Ireland, the law presents a “challenging issue” to the industry because it adds costs and impacts productivity.

Abolishing the law would be a contentious decision because it is popular with labor unions.

Easing Visa Restrictions

In 2015, visitors from other EU member states made up 67 percent of visits to the UK and 44 percent of spend, according to statistics from VisitBritain.

If Brexit reduces travel between the UK and the 27 remaining EU countries, then it makes sense to look elsewhere.

The problem is that the UK’s visa policy towards places like China is regressive, especially compared with the EU.

In 2015, the UK promised to make things easier but as of yet nothing has changed. A visa for the Schengen Area, which gives access to 26 European countries, costs around $124 (€99), the U.S. charges $169 (£119), while the UK charges $1,091 (£767), according to airline group IAG.

If the UK is going to move away from its closest neighbors, it needs to do something about its visa system.

In a submission to the UK government’s Digital Culture, Media and Sport Committee, Hilton said the “UK China Visa Alliance suggests that the UK still underperforms in the number of Chinese visitors it attracts compared with other major European countries,” and that “Britain’s market share of India’s outbound tourists has halved since 2006, despite the market growing at 10 percent each year.”

Cheap(er) Travel… For Now

One of the obvious upsides for the UK travel industry in the wake of the Brexit vote was the fall in the pound. After June 23, 2016, tourists saw the UK as a better value to visit. For the first 10 months of 2017, holiday visits rose 13 percent to 13.4 million.

Spending has also increased, up 10 percent to $29.8 billion (£20.9 billion).

The problem with this benefit, though, is that it is a temporary one. Indeed, the pound has rallied against the dollar in recent months. The UK’s attractiveness to foreign visitors may be temporary.

“The impact that the fall in the price in the pound… has on inbound is really quite significant,” said Deirdre Wells CEO of trade body UKinbound. “One of the things that we’ve been doing is trying to capitalize on that to really, I suppose, reinforce the value proposition that the UK can offer. But this is not something that will last forever as the on-costs will eventually find a way into the supply chain [and] there are various other challenges that will impinge on the industry…”

But, There’s a Catch

It is true that all these measures might eventually end up helping tourism. However, they are contingent on the UK exiting the EU painlessly — something that looks increasingly unlikely to happen.

There is no formal plan for the UK’s departure and a number of key issues, such as what happens at the border between the Republic of Ireland and Northern Ireland, need resolving.

More worrying still, is the government’s reluctance to publish any of the studies it has done into the potential impact of Brexit. Buzzfeed recently published excerpts from leaked documents showing the UK would be worse off under a number of exit scenarios.