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The Effect of the Brexit Vote on UK Tourism

When the United Kingdom (UK) voted to leave the European Union (EU) on June 23, 2016, the referendum sent political and economic shockwaves that rippled around the world. Numerous questions arose: what would the UK’s new political relationship with Europe look like, and what would the referendum mean for the thousands of EU citizens living and working in the UK (and vice versa)? Here at Ethical Traveler, we wondered what impact the so-called “Brexit” would have specifically on international tourism to the UK.

Concerns of the UK Tourism Industry

Prior to the referendum, a British Hospitality Association poll of industry CEOs indicated that 74 percent intended to vote to remain in the EU. Following the initial Brexit vote, tourism industry leaders in the UK expressed collective concern over the effects that the vote and subsequent exit from the EU would have on inbound tourism.  In 2015, a record 36 million international travelers visited the UK, generating £22.1 billion in revenue, but the future of the industry is now uncertain.

UKinbound, which represents 370 of the UK’s tourism businesses, released a statement indicating that “the decision to leave the EU is disappointing and inevitably will have far-reaching consequences for our members.” Ufi Ibrahim, CEO of the British Hospitality Association (BHA), wants to make sure that the BHA has “a seat at the table on all negotiations including taxation, immigration and regulation.”

As an industry, tourism relies on individuals having both the ability and the desire to travel to a given destination. With just under three quarters of the total visitors to the UK coming from Europe in 2015, reducing the desire and ability of EU citizens to visit the UK could well be catastrophic. Consequently, the UK will need to work very hard to prove that it is still a desirable and attainable destination for its European neighbors.

A Welcoming Destination?

In the weeks and months leading up to the EU referendum, political rhetoric on the “leave” side of the argument veered into highly xenophobic territory. According to the UN Committee on the Elimination of Racial Discrimination, “many politicians and prominent political figures not only failed to condemn…but also created and entrenched prejudices, thereby emboldening individuals to carry out acts of intimidation and hate towards ethnic or ethno-religious minority communities and people who are visibly different.”

During the weeks immediately before and immediately after the Brexit vote, more than 3,000 allegations of hate crimes (including, harassment, threats, and assault) were made to the UK police. In particular, UK newspapers reported a spike in hate crimes in the areas with the strongest percentage of “leave” votes. At the beginning of September, the National Police Chief’s Council confirmed that the increased number of hate crimes in the UK had continued in the months following the referendum, though the rate of increase has diminished. By the end of August, hate crime numbers were approximately 16 percent higher than they were over a comparable period in 2015, down from the massive 58 percent spike that occurred at the end of July. These kinds of figures are likely to give pause to international travelers who would be visible minorities in the UK environment, regardless of their country of origin.  

A New Tourism Action Plan

Partly in response to these concerns, the UK government released a Tourism Action Plan designed to give UK tourism a unified strategy to ensure future success. The document itself is almost relentlessly stiff-upper-lip cheerful, beginning with Prime Minister Theresa May’s introduction:  

“The British people’s decision to leave the European Union creates many great opportunities for growth, such as cutting red tape and forging partnerships in new and developing markets. Our stunning scenery hasn’t changed, nor our centuries-old monuments and cultural traditions. Together with industry, the Government will work to ensure that tourism continues to thrive as negotiations on the UK’s exit progress. The end goal is a Britain that is even more attractive, accessible and welcoming to visitors.”

Will less people come to visit Stonehenge after Brexit?

The new Action Plan, released on August 26, contains numerous positive elements, including a 2 percent cap on visa fee increases each year and improvements to the visa system for “key tourism markets” such as China and the Gulf States. However, the document does not address how political and social xenophobia could affect the experiences of travelers from these key markets. The Action Plan also includes elements to increase tourist visits to destinations outside of London, including newly-developed rail itineraries and the creation of a £40 million Discover England fund.  

The Action Plan also includes new provisions for increasing the appeal of jobs in the tourism sector and for changing the design of industry apprenticeships, but it fails to address the effect that the Brexit vote will have on the people currently working in the industry. According to People 1st, which describes itself as “the leading skills and workforce development charity for employers in the hospitality, tourism, leisure, [and] travel” industries in the UK, migrants constitute just over a quarter of the hospitality workforce.  Numerous hospitality workers could very well lose their work permits and/or visa status under the new regulations, which could leave hotels short-staffed and negatively impact guest experience.  

Short Term Effects and Long Term Projections

Given the political uncertainty and recent incidents of xenophobia, and given that the new Action Plan has only been active for about a month, one might expect that tourism to the UK has decreased since the referendum. In fact, the opposite is true. In July of 2016, 3.8 million visitors came to the UK, an all-time record for monthly visits.

Kareen El Beyrouty, a London-based economist, says that these short-term gains are not surprising.  “With the pound relatively weak, it’s a big incentive for a lot of Americans and Europeans to travel here,” El Beyrouty told Ethical Traveler, since dollars and euros now go farther than they did just a few months ago.

In addition, many people traveling this summer planned their trips long prior to the referendum, and others are likely trying to visit the UK now before the Brexit actually takes place. El Beyrouty adds that most of the influx of tourism has been focused on London, the most cosmopolitan center of the UK, where visitors who are visibly minorities are likely to blend in better than they would in more rural parts of the UK.

“It’s really difficult to say what the long-term effects will be,” says El Beyrouty, “because the Brexit hasn’t actually happened yet.”

Now that the new Action Plan is beginning to be implemented, it’s possible that the UK’s tourism numbers will remain steady or increase. However, the major issues of travel visas and work permits for EU citizens remain largely unresolved and/or surrounded by confusion. An actual date for the Brexit will not be set until Prime Minister Theresa May invokes Article 50 of the Lisbon Treaty, which she says she will not do until the end of 2016. Since Article 50 stipulates a two-year negotiation period for a country leaving the EU, it’s probable that the actual Brexit will be sometime at the end of 2018. A great deal can happen politically and economically in two years. Consequently, the long-term impacts of the EU referendum on international tourism to the UK are nearly impossible to predict.

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