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“No deal” Brexit would deal a blow to UK outbound travel

“No deal” Brexit would deal a blow to UK outbound travel

A ‘no deal’ Brexit would lead to a long-term decline in UK GDP growth, and curb the expansion of the British outbound travel market, according to research for World Travel Market London – the leading global event for the travel industry – released today (Tuesday 7 November) at WTM London.

About 85 million outbound departures are forecast for the UK this year, according to the Top 100 City Destination Ranking WTM London Edition, by Euromonitor International.

If a free trade agreement is reached, then that figure is forecast rise to 102 million by 2025.

However, in the ‘no deal Brexit’ – described as the worst-case EU exit scenario for the UK – outbound departures are predicted to grow more slowly, reaching 96 million by 2025.

A third scenario is a ‘light Brexit’, with a more relaxed UK position on immigration in return for access to the single market. If this is negotiated, then the outbound market is forecast to grow much more strongly, reaching 106 million by 2025.

Meanwhile, the inbound market is forecast to grow under a ‘no deal’ scenario, rising from 38 million arrivals in 2017 to about 49 million by 2025 – marginally faster than the baseline forecast from Euromonitor.

If a ‘light Brexit’ deal is agreed, then inbound arrivals would grow at a slightly slower rate, reaching 47 million by 2025.

Whatever deal is negotiated, the referendum result in June 2016 has already had a significant effect on Europe’s travel market, says the report.

“Brexit, and the subsequent fall of the pound, have had a major impact on the travel industry in the UK, with arrivals growing strongly by 5.2% in 2017, while outbound departures are forecast to decelerate in 2017 as UK consumers have less money to spend abroad,” the report states.

“2017 was a positive year for inbound arrivals, but with the terrorist attacks in London and Manchester, arrivals growth is expected to slow in 2018 to 2.6%.”

The researchers expect the UK to achieve VisitBritain’s target of 40 million inbound arrivals by 2020 – thanks to strong inbound demand from Europe, North America and Asia, buoyed by the pound’s depreciation.

The prospect of the UK’s departure from the European Union is also making travel firms more uncertain about the future.

The report warns that Brexit is fostering a “them vs us” mentality, with neighbouring countries in Europe’s fractured business landscape vying for businesses and start-ups.

Furthermore, the report said: “Brexit threatens to undermine London’s dominant position for ease of doing business and its attractiveness as a start-up hub.

“Competing cities that have emerged to steal its crown include Paris, Frankfurt, Berlin, Stockholm, Dublin and Amsterdam.”

WTM London, Senior Director, Simon Press said: “Brexit dominated the debate at last year’s WTM London and this year will be no different.

“The UK’s departure from the European Union is considered by many to be our generation’s greatest challenge, and firms are uncertain about crucial issues such as freedom of movement for travellers and workers.

“Our programme at this year’s WTM London will help delegates understand the implications more clearly – for example, our World Travel Leaders and aviation sessions will discuss the impact of Brexit, and our Leaders’ Lunch will feature the European Parliament’s chief Brexit negotiator, Guy Verhofstadt.

“He leads the European MEPs’ negotiating team, which is a key role because the European Parliament will have to ratify any Brexit deal between the EU and the UK.”

eTN is a media partner for WTM London.

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