No winner in sight as travel industry stuck in limbo over Brexit

It may be premature to speculate on Brexit’s impact on travel, but bright spots are few

Uncertainties abound in the UK travel sector with the outcome of Brexit still up in the air weeks ahead of its planned deadline, but buyers and sellers at ITB Berlin are cautious in speculating what this may mean for business coming into Asia.

In January, IATA warned that up to five million flights would be at risk if the UK leaves the EU without a deal. A no-deal Brexit was feared to see airlines capping flights at 2018 level, although tickets for 2019 routes were already on sale. Late last month, the EU reportedly stated its intentions to lift this cap.

It may be premature to speculate on Brexit’s impact on travel, but bright spots are few

More recently, research by a product comparison website claimed that half of British holidaymakers could ditch European mini-breaks as a result of Brexit, with higher flight costs a concern.

Frank Wiegand, director of team sales Europe at Focus Asia, said: “There could be some legal problems for a short while, leading to certain Europe flights (operated by UK airlines) being unable to continue – but these will be solved.”

On whether these uncertainties could translate to speculative buying of Asian holidays in the short term, Wiegand was doubtful. “Asia is more expensive. I don’t think a family in Birmingham originally intending to visit Spain will decide on Thailand instead. (Those choosing Asia and Europe holidays) are different markets.”

Particular segments of Brits may even choose to travel closer to home. “I think the concern about being close to home is valid, particularly in the months immediately after Brexit. Our clients tend to be decision-makers within their business. They want to feel they can react quickly to any crisis. You can do a conference call but sometimes you feel the need to be present,” said David Kevan of Chic Locations.

Paul Gorman, senior manager – owner engagement, of Luxury Escapes, which is plotting its move into the European outbound market, said: “Whether Brexit will have an impact depends on what the result is. At the same time, (a great deal of) airline capacity is coming out of Europe into Asia and vice versa. The barrier to getting to places now is so much less, you can fly between Singapore and Berlin (on an LCC, for example). Ultimately it’s about (the desire to travel). I don’t think Brexit will slow that down. “

As for intra-Europe travel, he said: “Nobody knows how it’ll be in terms of operating licences. Guys who have UK or Irish operating licences like Ryan Air and EasyJet may have to reapply for landing rights. I suspect that will be worked out before (the deal is final), (but it is still) a big risk to a lot of companies.”

Perhaps, a potential slump in the UK economy and currency are larger concerns.

“Nobody knows yet what the result of Brexit might be. Does it happen in March, June, or ever? Will they hold another referendum? The only risk I see is there might be less Brits travelling at all, whether to Europe or to Asia,” said Wiegand.

If or when the pound takes a hit, “travel everywhere will get more expensive”, Wiegand explained. “It happened in Russia years ago, and there could be a similar crisis ahead of the UK.”

“Brexit opens up two levels of uncertainties. On the consumer level, travellers are not sure what’s going on and how it would affect them personally; on the trade level there will be more uncertainty over currency issues, with the pound already hit really hard a bit ago, will there be even further impacts?” said Willem Niemeijer, CEO & co-founder, Khiri Travel.

With travellers’ spending power affected, Kevan suggested that the UK’s travelling demography may shift towards those age above 35.

“Like with everything, a door closes and another opens. There will be problems and opportunities in equal measure. I would probably be much more concerned if (over half) of my business came from under 35 year-olds .”

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