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What Brexit Means for International Travel

Is Brexit Bad for Travel?

Pro traveler Jenn Miller explains how Brexit is changing things (slowly, democratically) and why some changes may even be good for your around the world trip.

“Bloody hell,” he cursed, slamming down his beer on a Spanish café table, “This means I’ll have to stand in line with everyone else getting into the continent!”  I chuckled, sipped my vino tinto, “Like me…” I raised my eyebrows over my glass.

“Erm… yeah… you… and the rest of the North Americans… sorry… I mean, I know you all have to stand in line… but I’m European! And I’m proud to be European! And now my country is daft enough to want out of that? This isn’t just going to complicate travel, it’s going to affect our trade agreements and everything else. I mean, we’re a tiny island, we don’t run the world anymore. We should be staying in the EU.”

Just days after the Brexit vote rocked the EU, I found myself sitting under a beer-branded umbrella with a fellow from London, who, two drinks in, was well into his rant of incredulity over the unexpected outcome that threatens to remove the UK from the union of European countries. Of course, there are arguments to be made on both sides, from immigration to economics, but I think it’s safe to say that more than a few people, inside and outside of the UK were surprised by the vote.

Beyond the loss of their EU credentials and the very real possibility that UK citizens will find themselves, as my drinking buddy so fears, standing in line with the masses at European entry points, what are the implications for those who travel? Both within the UK, and for foreigners visiting the island nation?

Exchange Rates

How does Brexit affect exchange rates & the cost of travel

The immediate effect, of course, was that a historically pricey destination became an overnight bargain as the Pound plummeted against the US dollar (and others). A friend of mine, who was on Remote Year, stationed in London for the month, was all over our slack feed rejoicing at the increased value of her money. But is it still a deal as fall is upon us and we’re into the third month since the vote? The answer is yes. The Pound continues to be at almost historic lows against the US Dollar. That’s good news for those of us with stronger currencies, and it’s also good news for the tourist economy within the UK as the exchange value, coupled with plummeting airfare costs between major ports in North America and Europe make it not only affordable to be in the UK, it’s downright cheap to get there too.

The flip side, of course, is that travel has just gotten far more costly for citizens of the UK, who are very used to the strength of their currency stretching their vacation budgets further. According to Hospitality Net analyst, Larissa Lam’s report on Brexit and Travel :

“In 2015, the UK outbound travel market was worth more than GBP 39 billion for 65.7 million visits.”

With the economic downturn resulting from the Brexit vote, including the instability in the banking sector, employment rates in the full time sector falling, and pay rate freezes,  it is very likely that UK residents will be tightening their belts and perhaps revisiting the American post-economic crash trend of the “stay-cation.” This is worrying for foreign economies, notably in Asia, that are buoyed by tourist dollars and where the UK tourist trade deficit is likely to be felt acutely in the coming years. Economically, no man (country) is an island, even when it actually is geographically speaking.

Open Skies… Less Open

How will Brexit affect international travel and stopovers in London

As my boozy friend in the Spanish countryside pointed out so astutely, the other rather big deal with Brexit is the issue of travel within the EU, and not just for the British. The “Open Skies” policy that has made travel within the EU such an easy-breezy experience will now have to be amended to exclude London; a major port of entry fro the throngs of tourists arriving from the west. The inexpensive discount airlines that have thrived in the open economic and borderless environment are already feeling the crunch.

As Easy Jet reported: “It is expected that revenue per seat at constant currency in the second half will now be down by at least a mid-single digit percentage compared to the second half of 2015.

“In addition, recent movements in fuel prices and exchange rates are now expected to add around £25 million of additional cost in the year to that guided at the half year results. In response, Easyjet is continuing its efforts to drive ex-fuel cost savings.”

Then there’s Andrew Swaffield, CEO of Monarch, who, “warned an exit would ‘most likely’ lead to higher air fares and fewer scheduled flights between the EU and the UK.”

And as for the Open Skies Policy, well, for the moment it’s business as usual, both for UK citizens, whose passports and driving licenses will continue to bear the EU stamp for now, and for travelers passing through the UK. But the Evening Standard writes, “It is likely that airlines will restructure into separate UK- and EU-based corporate entities, adding complexity and cost, and reducing flexibility,” writes the Evening Standard. Translation: flying between the UK and the EU is about to become more costly and a bigger pain in the neck. For those of you with nostalgia for the “good old days” of travel and the Europe of your high school Gap Year, you’re welcome.

Anecdotal Evidence

All I can tell you is what I know from personal experience, and that is that I’ll go pretty far out of my way not to have to enter Europe through London. But that has nothing to do with how I feel about the UK, or Brexit, and everything to do with my loathing of Heathrow, which has been rated the most stressful airport in Europe.

I can also tell you that my expat friends in Britain report business as usual once the dust was settled, with perhaps a little extra padding in their weekly pub budgets. Party on.

Lea Woodward, a powerhouse of a business woman, friend, and sometimes collaborative partner of mine had this to say, on the morning after the night before of the Brexit vote:

“Nobody knows (what the implications will be) all we know is that we don’t know.  Yes, we can predict the short term economic fallout, but in the longer term no one knows. So, there is doom and gloom… everything changed… and yet really, it hasn’t… we’re all still okay, we’re all still here.
There’s a process for the UK exit, democratic all the way through, and we hope to be given a voice in the changes going forward. The only thing we can guarantee is change… isn’t that true no matter what?”

The essence of life, the world, and more myopically, travel, is change, is it not? It’s change that we’re all looking for, and it’s change we’ve got in the Brexit vote. The implications for the continent and world economies could be far reaching, or all of this drama about the Brexit could be nothing more than a tempest in a teacup. Time will tell.

In the meantime, travel on. Visit the UK while your dollar has greater value. Britons, get out there and make the most of what you’ve got. Your wallets may be feeling a pinch as you go west, but Southeast Asia remains a great value, even with the decline of the pound. And Americans, show that ‘merican congeniality you’re famous for. If you find yourself in a one-horse town in the Spanish countryside, and buy that loud mouthed Brit a drink. He needs it!

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