Professor Nigel Morgan PhD, FTS, FCMI,Associate Dean & Head of Business, School of

Management, Swansea University

The Impact ofBrexit onTourism

25th. April 2018

@touristuff

UK and EU tourism industries arehighly interdependent

• 45.7m (76%) trips by UK residents to otherEU destinations and 23m (67%) of visitorsto the UK come from other EUdestinations.

• Visitors from the EU contribute around£10bn to the UK economy each year

• Outbound tourism to the EU contributesan estimated £19bn to the UK economy.

• One of the main reasons for this high levelof interdependence is the Single Market.

UK Outbound toEurope

• Spain was the most visitedcountry with over 14.6 millionvisits by UK residents in 2016.France and Italy ranked secondand third. In total UK residentstook over 56 million Europeantrips in 2016.

• Will UK travellers continue thisvolume post-Brexit?

UK visitor economy

• Worth more to theUK economy than theagriculture orautomotive industries

• Generates £130bn inrevenue for the UKeconomy earnings &employs 3.1mpeople.

• It is essential that thetravel industryprospers post-Brexitand business& leisuretravellers continue totravel freely andenjoy the currentbenefits.

How is the UK industryperforming?

• Since 2009, the UK tourism industryhas grown at a faster rate than manyother industries

• Generated additional employmentat almost twice the rate of otherindustries

• Increased export earnings by 26.5%

• Significant incubator forentrepreneurship and start-ups

Sources: UKTA 2017; GBTS, 2016 & IPS 2015

Brexit’s unseen consequences

Brexit challenges

• 80% of the UK’s top 10 markets are European and accountfor 50% of spend

• Brexit impact on UK destination reputation unknown

• Higher insurance and medical costs for UK/EU visitors?

• Increased fuel and APD costs may deter UK/EU visitors?

• UK will look to develop long-haul markets/staycations?

Key brand challenges

• A survey asks travel industry representatives andstakeholders at the London WTM exhibition (UK) towhat extent Brexit has impacted the UK’sreputation as a holiday destination.

• In 2016, following the referendum results, 42%believed the result had some negative impact. By2017 this figure had increased, with 62% believingthe result has had a negative impact on the UK'sreputation as a holiday destination.

• Barclays’ Destination UKreport highlighted that in asurvey of more than 7,000international holidaymakers,over 60% stated that theywere now more interested invisiting the UK than they were12 months previously.

• 97% also responded that theywould like to see the UK inperson, either in the comingmonths or at least some pointin the future.

• This probably reflects non-EUmarket perceptions andattractiveness of lowexchange rates

Impact on UK Inbound travel

UK travellers will look more to home…

• UK travellers expect holidaysto EU member states to beaffected by Brexit.

• Almost half of surveyrespondents expect lessfavourable exchange rates ontheir holiday destinationswhile around a third expectmore expensive air travel.

the total number of visits made by travelers from the United Kingdom to European countries (for all travel purposes) in 2016,Show more

The mobility challenge

• EU nationals tourism and hospitality workers increasedby 23% 2011-2016 in the UK.

• As the UK unemployment rate has fallen, businesseshave become increasing reliant on EU nationals to fillvacancies.

• UK citizens work in Europe supporting seasonal tourism(e.g. ski holidays); these could be under threat post-Brexit.

Funding challenges

• Money talks and works. Every £1 spent onmarketing generates £23 in visitor spend (VisitBritain).

• Local government tourism budgets are fragmentedand decreasing.

• More investment required across the board andkey regions will lose EU funds.

• Wales’ natural and legislative environment andits strong adventure travel brand means it canbe a global beacon for adventure and wellbeingtourism.

• Tourism delivers £6.9bn Gross Value Added tothe wider Welsh economy and supports almost250,000 FTE jobs. It is a major export industryfor Wales, with 80% of visitor spend comingfrom outside Wales.

• Wales’ tourism industry has received EUfunding for marketing & product development

• Wales’ overseas market accounts for 10% ofvisitors but 20% of spend.

• Future growth in Welsh tourism is likely to bedriven by the overseas market.