The initial boon that the British travel and tourism sector got from the country’s vote to leave the European Union appears to be wearing off.
Figures from the Office for National Statistics on Friday showed that the number of overseas residents visiting the country in the last three months of 2017 was down 7 percent from the year before, while their total spending decreased by 3 percent.
In 2017 as a whole, visitor numbers rose 3 percent to 38.9 million while spending swelled by 8 percent to 24.3 billion pounds ($34.3 billion).
Overall, the sector enjoyed a solid year as the sharp fall in the value of the pound following the Brexit vote in June 2016 made Britain a more attractive holiday destination, particularly for a country widely perceived as one of the more expensive places to visit.
Further clarity over whether the fourth quarter decline is a sign of things to come will emerge in coming months. After all, the sector enjoyed a big bounce in the latter part of 2016 in the immediate aftermath of the Brexit vote as tourists took advantage of the lower pound. As a result, a fallback was always likely.
Though the initial impact of the Brexit vote has been positive, the sector faces a series of challenges.
One relates to staffing — a large number of the people employed in the sector come from EU countries, so a clampdown on post-Brexit immigration could do big damage.
There’s also uncertainty about the future aviation arrangements between Britain and the EU. The British government wants a post-Brexit agreement that will allow it to retain easy access to EU markets. And tougher border restrictions related to security could also dissuade visitors.
Britain is currently in the midst of negotiations with the other 27 EU nations over the terms of their future relationship. Issues related to migration, aviation and security are high up in those discussions but the sides have yet to strike any definitive agreements.
Britain is due to leave the EU on March 29, 2019 and both sides have agreed on a transition period lasting until the end of 2020, during which time the current economic arrangements remain in place.
“If the U.K. is to benefit from the significant opportunities offered by tourism over the coming years, I would encourage the government to prioritize the needs of the sector,” said Gloria Guevara, president and CEO of the World Travel and Tourism Council.
“The prize is nearly 40 billion pounds in exports per year and around 400,000 new jobs — vital for the economic success of Britain outside the European Union.”