ABTA warns against UK exit from EU in new report
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ABTA has launched its first major report into the potential impacts of a UK exit from the EU on the country’s travel industry.
With economic analysis from Deloitte,‘What Brexit might mean for UK Travel‘ assesses how the existing relationship between the UK and the EU has affected UK travellers and the travel industry, and looks at what the likely impact would be of a “leave” vote on consumer confidence, expectation and behaviour, as well as on the industry.
Over 29 million foreign holidays each year are made by UK holidaymakers to EU countries, equating to 76% of all holidays taken. Additionally, 68% of all business trips from the UK are to EU countries (4.6 million business visits).
There are currently many EU regulations that have been designed to benefit holidaymakers and business travellers. Although these regulations would not change immediately, Brexit could have a significant impact in the future. Current regulations include:
- financial protection for package holidays
- compensation for flight delays
- access to free health cover through the European Health Insurance Card
- caps on mobile phone charges
- ‘open skies’ across the EU, resulting in more routes, more airlines, and lower fares
Of immediate concern is the impact that a period of prolonged uncertainty will have on the strength of the Pound versus other currencies. A weaker Pound has a direct impact on spending power overseas, making the cost of holidaying or visiting abroad more expensive, as well as adding costs for UK businesses to buy abroad.
Mark Tanzer, ABTA CEO, said: “Our assessment of the report’s findings is that a vote to leave will lead to uncertainties and may lead to increased costs for travel businesses and the travelling public. We recognise that people will approach this referendum by considering many factors – personal, professional, and economic – before casting their vote. ABTA has considered what a vote to leave the EU might mean purely from a travel perspective. Our view is that the potential risks and downsides are not matched by an equal upside for the traveller.”
The study surveyed various industry stakeholders, including Andrew Swaffield, CEO of Monarch Group. Swaffield predicted an exit from Europe would have negatively impact the UK travel industry.
“The free movement of people across the EU has contributed to frequent travel between Member States and the decision by many UK citizens to take up property in countries such as France, Spain and Portugal, either as their main or second home,” he said.
“The emergence of low cost airlines has increased competition and helped to cut prices for consumers in the airline industry. As the cost of travel has reduced, consumers have been able to take more frequent trips and in some cases even commute between two different European countries.
“The low cost airlines have helped to create huge social change in travel behaviour and it has been a big benefit to the consumer. We estimate that we fill circa 2 million seats a year with travellers who travel between the UK and their homes in Europe. We see a huge number of travellers with British names travelling with us one way between the UK and key European destinations.
“If the UK were to exit the EU, Monarch would view the outcomes for the travel sector as very negative, not least because of the uncertainty that would follow in the aftermath. This sweating period after the exit would be very damaging for the sector. An exit would most likely lead to higher air fares and fewer scheduled flights between the EU and the UK. It could also bring an end to the European Health Insurance Card and shared tax laws that benefit many British home owners and expatriates living in the EU.”
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