How Brexit will affect tourism sector in Europe?

Published on : Friday, June 24, 2016

euroep travelDavid Cameron has announced his resignation as Prime Minister following the UK’s vote to leave the EU. Britain voted for Brexit by 52% to 48%. Following the result, value of pound reached the lowest level since 1985.

 

With the advent of the peak travel season where thousands of tourists have planned to enjoy a vacation in Europe, is facing the dilemma about the probable effects of the ‘leave vote’. They are yet to discover the immediate changed prices in the commodities and tickets which in future will lead to further hikes.

 

 

The immediate query that is hitting the blocks is whether the holidays will cost more. The answer lies in what the value will be settled at before the referendum. According to the Treasury, the predicted sterling would lose 12-15 per cent of its value on a Leave vote. But in longer terms, the two major key rates are against the euro and the dollar.

 

The €:£ rate is fulcrum to all international companies including the tour operators, businesses etc. Generally, travellers prefer to visit the foreign holidays which has single-currency area. Be it Spanish Costas, Italian cities, French countryside or islands of Greece – they all have to maintain a decent €:£ rate.

 

 

According to the industry experts, the destinations in Asia and America like the US, Dubai and China will also see a proportional rise. In many cases, the currencies are locked to the US$.

 

How the pound price and $:£ rate is essential as it affects the oil price, aircraft costs etc. So, following a 12% fall in the sterling will push up the price of petrol, diesel and aviation fuel, as well as the cost of aircraft for airlines such as British Airways and easyJet.

 

 

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3 Responses to How Brexit will affect tourism sector in Europe?

  1. Young people’s apathy in Britain cost them their EU membership. Just over half of young people turned out to vote. If more young people had voted, the result would have been different. They’ve let the older generation decide their future, simply by not turning up to vote.
    The Pound has lost massive value, but emerging markets like South Africa also took a tumble, so the Pound is still very strong against the South African Rand (about R21 to the Pound). This means South Africa remains a very affordable holiday destination for tourists from the UK. We expect to see an increase in arrivals from the UK over the next couple of years.

  2. Tom says:

    Boris Johnson is Netanyahu’s man Friday–his mom comes from a long rabbinic line. Israel cannot annex most of the West Bank with a strong EU and the UK in the EU. So, of course, all other considerations are secondary. Same in the U.S. with Trump (backed by Sheldon Adelson, Netanyahu’s backer.) It’s the old Hegelian dialectic: thesis, antithesis, synthesis.

    My question is: What was wrong with the old EEU?

  3. Chris from Tour Providers says:

    I’m delighted with the result. We must remember that there is a see-saw effect of fluctuations to the pound. If it stays low it will be cheaper here for inbound tourists and, in terms of the UK economy, it gains more if people spend money here rather than abroad. Also don’t forget that the sizable majority of tourism is domestic. I do hope and believe however that the pound will strengthen after the initial turbulence of the result.

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