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How Will Brexit Impact Travel And Tourism?

With the United Kingdom officially exiting the European Union on January 31st, 2020, the entire world will have to deal with its lasting implications. While economic, social and political ties are set to change in the near future, travel and tourism may also see significant changes post the transition period that will end on 31 December 2020.

According to a report by Deloitte, there are strong travel and tourism flows between the UK and EU. The EU is the main destination for UK tourists and the main source market for overseas tourists coming to the UK. With Brexit in place, how will the movement of tourists be affected? The looming uncertainty during the negotiation period could jeopardize several things. 

With Brexit, “the value of sterling could be impacted. The extent to which operating from outside the EU would increase costs for the travel industry would depend largely on the agreements the industry would adopt and the ease at which it could transition to the new arrangements”, according to the same report. 

Brexit’s impact on travel and tourism employment

The UK economy does benefit greatly from employment opportunities in the travel and tourism sector. In 2014, the sector contributed 4.23 million jobs in total, with 1.89 million people being directly employed in the industry. This sector relies on a significant number of migrants for employment. If there are changes that prevent the UK from employing foreign nationals, including those from the EU, the travel and hospitality business might be hit. Especially since there are shortages in current levels of employment and skills. 

The consumer impact of Brexit

Air travel

In the past, because of the  “open skies” agreement among countries with the European Common Aviation Area (ECAA), of which Britain was a part, air travel between these ECAA member countries was easy. However, post-Brexit,  airlines will need to seek permission to fly to an EU country, while carriers in EU countries will need to do the same for flights to the U.K. If these permissions are not granted on time, there could be several delays in departures and arrivals of flights. It is left to be determined how the EU and Britain will negotiate this specific area. 

Freedom of Movement

The UK does retain passport control and is also outside the border-free Schengen Area. This is why UK consumers are able to travel freely within much of Continental Europe. However, post-Brexit, UK-EU travel will solely depend on the mutual settlement that is reached. Additionally, for travel outside the EU, the UK will be able to seek new bilateral visa agreements with non-EU countries.

Insurance and medical emergencies

The EHIC (European Health Insurance Card) is available to all EU residents and offers them access to local health services. They presently apply to all EU and EEA countries. Now, with Brexit in place, its applicability could be called into questions. This would directly limit UK travelers’ local health care access thereby having implications for travel insurance premiums. 

The travel and tourism industry could be facing an upheaval in the upcoming months because of Brexit. It is left to be seen how individual sectors of the travel industry both within the UK, the EU and globally will cope with new regulations and relations. 

 

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