Brexit is here. But what does that mean for the luxury and business travel industry? Well the reality is that very little will happen will happen for the time being, especially in terms of travel outside of the EU. Even within the EU, existing regulations will remain in place for two years, even after someone pulls the trigger on section 50.
The one real immediate impact we are seeing is the weakening in value of the pound. At the time of writing, approximately three weeks after referendum day, the pound is still down 10% against the dollar. Against some currencies it has slipped a little, while against others; slightly more.
Already holidaymakers and travellers are experiencing less value in the exchange rate then we have seen in previous months; meaning people are having to spend a little bit more for every cocktail, meal and souvenir they buy overseas.
At the moment the markets are very volatile, so the message is 'shop around for your holiday money'. There are plenty of places both online and offline where holidaymakers can find a good deal. Buy when you feel that the markets are settling, or only when you have to.
The other way to limit your exposure to unexpected currency fluctuations while abroad, is to go for a more ‘inclusive’ holiday package. Many of these packages offer great value for money, providing excellent food, drink and water sports activities, meaning you can budget far more easily.
Long term, whether you choose to fly in economy, business or first class, all the airlines are still going to be competing for your hard earned money and with the re-working of air regulations should be flying the same routes as pre-Brexit. This competition is likely to keep prices pretty stable. Likewise, although some expect the price of hotels to increase temporarily, they equally want your business as much as travellers want to enjoy the delights of a luxury holiday. So again, the good deals will be out there.
Another long term effect we as an industry may have to contend with is a much more uncertain economy caused by Britain leaving Europe. This could swing in one of two ways. Firstly, that the ‘Brexiteers’ were actually right, and leaving will have a positive effect on the country and on the value of the pound; in turn will having a very positive effect on the industry. People will be able to spend more on luxury holidays and will see a better return on their currency when its exchanged.
The second and more negative option is that we will continue to see the stability of the economy decrease further and, along with it, the power of the pound against other currencies. This in turn may lead to an increase in taxes, leaving consumers will have less money, making travel in general an unaffordable option for many.
It would also be naive to think that the amount of business travellers to the UK would remain the same in the post-Brexit landscape. ABTA, the UK’s largest travel association reported that in 2014, 73% of all business visitors to the UK are from EU countries; that's six million in total. Likewise, they found that 68% off business travel out of the UK is to EU countries, totalling 4.6 million people.
Personally I think the fallout will be far less painful than many originally imagined. Whichever way it goes, the Brexit train is leaving the station, so let’s jump on and make the best of it!
Visit justflybusiness.co.uk for more information.