We questioned the Chairman of Pangaea Network, Mr. Massimo Tocchetti, about Brexit. Below his insight.
“I think that the impact of the UK’s exit from the European Union, which will officially take place in March 2019, has to be considered in both the short and medium-term, as well as from both the inbound and outbound perspectives.
As of today, the depreciation of the Pound, which has dropped 16% in value compared to the Euro and US Dollar, has produced a hike in tourist arrivals and consumption as travel services and goods are tangibly cheaper than before. According to Visit Britain, the UK is expected to end the current year with a record number of 39.7 million international visitors (+6% on last year) and with an expenditure generated by travellers of around 29,000 million Euros, an increase of 14%. The above performance relates to all international markets, but particularly Europe and US.
This is obviously a good result, but the forecast for the future is less positive, as the Pound is expected to stabilize after these fluctuations and the positive effects of a cheaper currency will be diluted. According to a study conducted by Euromonitor, arrivals growth is expected to slow in 2018 to 2.6%. Despite this, the UK is expected to achieve Visit Britain’s target of 40 million inbound arrivals by 2020, thanks to strong inbound demand from Europe, North America and Asia. However, London is predicted to lose its third position among the most visited cities worldwide, surpassed by Singapore, Macau and Dubai.
It is also important to note that British outbound tourism has been particularly resilient, as many destinations still see growth in terms of arrivals from the United Kingdom. Apparently the lower value of the Pound has not affected the intention to travel, but it is likely that in the future the British will take fewer trips abroad due to several reasons: lower value of their currency, heavier custom controls, the possibility of the abolition of the rights of UK travellers to roam freely and their right to free hospital treatment in the old “Continent”. In addition the increases to the cost of living in the UK, which has already been seen, will leave the British less money to spend abroad. “