With Brexit the hottest discussion topic in town, Euromonitor International predicts what the future of the travel industry might look like after March 29 next year.
A “no-deal” Brexit would see five million fewer outbound trips in 2022, according to Euromonitor International.
If the UK crashes out of the European Union without a trade agreement, millions of Brits will stay at home and not book overseas holidays, reveal findings from global market research provider Euromonitor International’s study, which will be presented at WTM London tomorrow.
Euromonitor International’s research team predicts that a “no-deal” Brexit scenario next March would lead to a fall in outbound demand in 2019 and cause a ripple effect across many destinations, dependent on UK demand.
Caroline Bremner, head of travel at Euromonitor International, said consumer confidence declined in 2018 for the EU, with the UK witnessing a faster deceleration.
“A ‘no-deal’ Brexit is forecast to result in five million fewer outbound departures in 2022 than would have been the case under the baseline scenario,” she said.
“With the UK economy in a state of flux and a decline in the value of sterling, departures would stagnate over 2018 to 2020.”
She predicted that a “no-deal” scenario would see the pound fall by about 10%, on top of a decline in 2018, which had seen the currency drop to its lowest level in a year by the end of August.
The falling value of sterling will make the UK more attractive to overseas visitors, but Bremner warned: “Any ‘no-deal Brexit bounce’ is only forecast to add 2% more arrivals in 2022 than under the baseline scenario.
“The USA would be the source market contributing the most under this scenario, but with fewer than 100,000 additional arrivals over 2019 to 2022.”
Furthermore, the fallout from a “no-deal” Brexit scenario would be felt worldwide, added Bremner.
She pointed out Spain in particular, where UK travellers account for 21% of inbound revenues in 2018.
“Brexit could reduce 2019 receipts by $747 million, compared to a delayed free trade agreement, with the UK accounting for over half of that,” she said.
WTM London’s Paul Nelson said: “With less than five months until the UK leaves the EU, there is still huge uncertainty about what the future holds, with many commentators thinking the likelihood of a ‘no-deal’ Brexit is increasing.
“It’s against this precarious backdrop that we hope to help the UK and global travel industry understand the potential impact of different scenarios so that they can plan for various eventualities.
“Brexit has been woven into the fabric of most of our debates and sessions at WTM London because it is the key challenge that our delegates have to grapple with.
“There were 46.6 million holiday visits abroad by UK residents in 2017 – if there’s ‘no deal’ in the negotiations, and the market does indeed drop by five million by 2022, that would represent a potential fall of about 10%.”