Brexit has increased European holiday prices by an average of £97 per person since 2016 and prompted some operators to cut nearly a third of their overseas staff, according to a new poll.
A survey of 65 independent operators in November found they had cut capacity by an average 19%, or 3,800 beds per week, meaning 66,000 fewer holidays on sale compared with 2016.
The research, A Crisis is Upon Us, carried out by pressure group Seasonal Businesses in Travel (SBIT), said: “This represents a loss of economies of scale for many companies which has filtered through to higher prices for consumers – despite the best efforts of most companies to keep prices down.”
The report found large firms were best placed to absorb cost increases, with an average £61 or 6% rise, with medium-sized firms raising prices by 14% or £98 and small firms by the same percentage, equating to an average £103 rise.
Skiworld sales and marketing director and SBIT spokesperson Diane Palumbo told TTG the £97 average increase applied to both summer and winter operators.
“I’m astounded it’s not more,” she said, adding the industry had kept costs down after “three terms of no-deal planning” since 2016 to “restructure, reorder and renegotiate” with suppliers to help offset the Brexit burden.
SBIT said the operators surveyed had cut an average 30% of staff and estimated there had been more than 1,700 jobs lost since the 2016 referendum, with a “significant acceleration” since the pressure group last highlighted the issue in August 2018.
The report said: “With most of these cuts affecting jobs seconded to the EU to run holiday operations being filled by 18 to 34-year-olds, it is this age group bearing the brunt of these job losses.”
Palumbo added that as well as the short-term impact, opportunities to progress into management would be “lost to the next generation”.
Operators, particularly those in the winter sports market, fear they will not be able to employ staff in-resort on UK terms, paying instead into more expensive foreign state social insurance schemes rather than UK tax and national insurance. Most have already cut back on recruitment as they plan 12-18 months in advance and there have already been two false Brexit dates.
“For many companies, cost increases of this scale will just not be feasible and they are not set up to be able to employ EU nationals,” said SBIT, adding some would not be able to reinvent their business models.
SBIT fears any points-based immigration system introduced by the new UK government will be mirrored by the EU “and at worst curtail them to such a degree that many UK companies’ business models will be rendered completely unsustainable”.
Palumbo said after leaving the EU, UK overseas staff would need to apply for right of stay and a work permit, and then have their passport stamped at the foreign country’s embassy unless a deal was agreed during next year’s transition period.
While SBIT estimates holidays to Europe in 2016 contributed £1 billion to the UK government, Palumbo added: “One of the things I’m astounded about is when we engage with government departments, they don’t seem to know or recognise the contribution the outbound market makes to the UK economy.”