Tourism In The Time Of Brexit And Trump

Travel restrictions and currency fluctuations are not the only politically-driven challenges, says Caroline Bremner (Head of Travel, Euromonitor International)

BREXIT AND THE USA: TOURISM IN TIMES OF POLITICAL DISRUPTIONS

Category: ITB Marketing and Destination Workshops Day 3

Date: March 10, 2017 Time: 1:30pm – 2:30 pm

Location: Hall Hall 4.1, Room Regensburg

Caroline Bremner (Head of Travel, Euromonitor International) is hosting a workshop called Brexit And The USA: Tourism In Times Of Political Disruptions, March 10. Speaking to ITB Berlin News about this developing situation, she expands upon the many ways that the changing political climate in the USA and Europe is affecting tourism, and how the industry should prepare to tackle these challenges:

The political sands have shifted greatly in the USA and UK in the past year. The respective votes for Trump and Brexit are expected to impact the forecast economic performance of both countries, which will take their toll on travel and tourism. From a source market perspective, the US and UK are the first and fourth largest sources of outbound demand in the world, and changes in their economic performance has a knock-on effect on travel activity in destinations across the globe. US outbound departures experienced strong growth of 4% in 2016, however, growth will decelerate to 2% in 2017, due to the uncertainty following the new President during his first few months in office. The pre-Trump forecast pointed to 110 million outbound trips in 2018, whereas Euromonitor’s Travel Forecast Model predicts that the US could potentially see 1.9 million fewer people going abroad over the next two years, with Mexico impacted the most. Other destinations that will feel the brunt of a US slowdown will be Canada, France, Italy and the UK. In the UK, the outlook for outbound tourism has been revised downwards since the Brexit vote due to dark clouds gathering over the country’s future and the depreciation in the pound, with departures expected to hover around 83 million over 2017-2018. In the event of a Disorderly Brexit, the impact on outbound travel would be acute, with a potential 8 million outbound trips cancelled or postponed over 2016-2018, amounting a sharp revision downwards to 75 million UK departures.

What are the economic and other effects we are seeing – and will see?

Euromonitor’s Macro Model predicts that the US economy will grow by one percentage point less under President Trump, with GDP growth of 2% in 2017, rather than the 3% pre-Trump forecast if Hillary Clinton had been the victor. Following the Brexit vote, the UK faces the very real prospect of a Hard Brexit, a scenario that assumes that negotiations with Europe will lead to an acrimonious divorce, with no trade agreements set in place after the UK leaves the EU once Article 50 is triggered. Spain, France and Ireland would feel the biggest negative impact on their tourism industries, with Spain potentially witnessing almost 2 million fewer UK tourists over 2016-2018.

How can industry professionals counter the negative effects?

As with any major upheaval, the global travel industry is highly resilient and it will be important for travel brands and destinations to apply a razor-sharp focus as always in providing consumers with a connected and seamless booking journey, ensur ing that the travel product offers value for money and that the technology and customer service enhances the customer’s overall experience. This attention to detail in the delivery and the importance on the execution and delivery of the user experience is critical in driving the virtuous circle of loyalty and trust.

Are there any destinations benefitting from this?

It is interesting to see that the main beneficiary of the political upheaval in the case of Brexit is the UK itself as a destination. The depreciation of the pound has made the UK a more attractive, value for money destination for international visitors with Amer icans and Europeans particularly taking advantage of the weak pound. Inbound arrivals are expected to reach hit 39 million by 2018