Brexit to fuel rise of holiday costs
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A majority of Brits fear their holidays will cost more next year because of Brexit – and almost a third of travel firms expect to raise prices as a result of the vote to leave the European Union, research published at World Travel Market London has revealed.
Research among British holidaymakers found two thirds (65%) expressed concerns about Brexit, mostly because of the plunging value of sterling and the impact on overall costs. However, a resilient 70% said the result of June’s referendum will have no impact on their holiday choice next year.
When asked about Brexit, the top worry – cited by 44% of the 1,445 respondents – was the sterling-euro exchange rate and how that will make holidays in EU destinations more expensive. The second concern – cited by 43% – was a more general worry about overall holiday costs rising. A third mentioned the potential loss of European Health Insurance Cards (EHICs), and a quarter said they were concerned about longer passport queues at airports.
However, just over a third (35%) had no concerns surrounding Brexit, while almost half (43%) said they would like to see a return to the traditional blue UK passport when Britain does leave the EU.
The findings reflect trends seen in the market, with travel agents reporting a slowdown in foreign exchange sales, and the share prices of leading travel groups falling in the wake of sterling’s slumps in June and October.
John Strickland, director at aviation consultancy JLS Consulting, said the fall in sterling generated immediate cost increases for UK airlines, as important expenditure items such as jet fuel and aircraft leases are denominated in dollars.
He said the UK outbound market to Europe and the US is one of the largest, and Brexit uncertainties could see airlines trimming capacity to and from the UK.
Caroline Bremner, head of Travel and Tourism Research at Euromonitor International, commented: “The depreciation in the pound will help to entice visitors to the UK in the immediate short term as international visitors will benefit from the favourable exchange rate for spending in-destination. “Yet it has yet to been seen whether capacity will remain at its previous pre-Brexit levels with some airlines already reducing their exposure to the UK market. “In terms of UK outbound, the drop in the pound and the economic uncertainty will be a big drag on UK residents travelling abroad, which will be a boon for domestic tourism.”
WTM London senior director Simon Press said: “With the pound at a record low, it means WTM London is great value for overseas participants, and a huge opportunity for the UK inbound and domestic travel trade.
“But the outbound trade may well feel the impact for summer 2017, as headlines about sterling make people think twice about an overseas holiday, and airlines have to pass on costs to consumers.
“However, as we have seen in the past, the UK holidaymaker is very resilient and is determined to book an annual break in the sun – and 70% of those we surveyed told us that Brexit would have no impact on their booking plans.”
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