The following is taken from a recent update from INBOUND in the USA….
I’d like to share with you the following in response to the question “How Will The Brexit Affect US Tour and Travel industry.”
Initially, with the devaluation of the Euro and GBP, it will certainly reduce travel arrivals from the continent to the USA, since roughly 40 percent of inbound tourism is sourced from the EU countries, while, at the same time, spurt interest from U.S. travellers in Europe. Already, tour operators have jumped on this aggressively on Facebook.
The real issue for selling the U.S. will be the end game, guessing where the exchange rate will finally rest without volatility, which is how the trade survived profoundly shocking disruptions of the Gulf War in the 90’s, 9/11 and the Great Recession. A stable exchange rate will at least allow those with resources to adapt.
(This morning (28 June), four days after the BREXIT vote, the Pound had fallen from $1.47 vs. the U.S. Dollar to $1.32, a decline of about 10 percent. The Euro had dropped from $1.12 to $1.10)
Regarding a silver lining, the only one I see for now is a cautionary tale where other countries such as France and Holland that have leaders already been beating the drum for their own exits, see first-hand the chaos, disruption and recriminations that have resulted in over 3 million people, many of whom voted to ‘Leave,’ sign a petition for a revote. And this from a country that didn’t have to suffer the unravelling of reverting from the Euro back to their original currency.
We’re advising U.S. clients that it is important now to maintain relationships with European operators as never before and offer help once the rates stabilize to create financial incentives to come to the US. MICE business will be the first to feel the impact as incentive travel will remain in Europe but leisure may return once they have confidence that the currency has found a bottom such as it did for Australia which shot up in 2015 by 18% even though the exchange rate dropped 30% in that period.
Our view and the message to US suppliers is that they need to continue to work tactically with the U.K operators, especially as we start to move in to the summer lates period and also the launch for a number of 2017 programmes. This will be very well received at this time and in fact more business may result from it.
North America is the largest long haul destination for the UK Market, in some cases accounting for up to 50% of an operators business. During this period of volatility they will be look for support and those destinations and suppliers that provide this will see the rewards in the long term.