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Brexit’s Impact to European Tourism: ATTA Member Insights

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Confession: The outcome of the June 23, 2016 Brexit vote came as a shock to me. Of course, few matters of this magnitude have occurred on European soil since WWII and other past European global-impact events were usually predictable. Lesson learned: anything can happen in these days in the face of such volatility worldwide, in particular in Europe, where unsettled national and pan-European social, economic and political dynamics continue to escalate at a blistering pace.

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To try to catch up to the surprise UK vote to leave the European Union, I reached out to some of the ATTA’s long-term members from both the public and private sector, to get more insights into game-changing development. As it turns out, I was not alone in my surprise, though at least one European national tourism board was, in fact, well prepared (while still very surprised) with post-vote statements, actions, and projections needed to make what it viewed as necessary adjustments (if any) to their incoming tourism forecasts.

“Uncertainty” was the unanimous theme echoed among ATTA Members in Europe – including from the UK – who responded to the ATTA’s June 24 email with questions about Brexit. Concerns revolved primarily about the unknowns brought upon by the outcome of the Referendum, coupled with an open air of shock and earnest disappointment. Most of the uncertainty seems to be fueled by the real and potential impacts to traveller confidence in the wake of the dramatic financial market and currency shifts, both in the short and long term.

Members’ disappointment (and mine) was, across the board, clear: most sense the vote to leave will run far deeper and embolden other countries to pursue nationalistic paths, perhaps triggering a domino effect.

“Europe will be weaker in the future, more vulnerable – [Brexit is] bad for society, bad for peace, bad for education, bad for just almost everything,” said ATTA Advisory Board Member and Head of Markets for Switzerland Tourism Urs Eberhard.

All in all, ATTA Members offered gauged, thoughtful and balanced perspectives.

“We will have to wait and see what the wider ramifications are for political unity across Europe. Uncertainty is usually never good for business but we are good at adapting,” said Paul Easto, ATTA Advisory Board Member and CEO of Wilderness Collective based in Scotland. “My hope is we adjust quickly to the uncertainty and tackle the changes we need to make arising from the UK’s exit. Pan-European trade is likely to get more complex — at least in the short term — as currency swings and changes to the tax regime work through. I’m confident that common sense will prevail in which it remains easy for visitors to travel to and within Europe.”

“The unique short term impact I see is the Pound devaluation. All the rest will take ages. And I believe this will be the main impact: uncertainty,” said Eric Balian, Managing Director of Terres d’Aventure, based in France. “The Pound devaluation will slow down outgoing tourism to the rest of Europe, and will have an impact on incoming in France, Italy, Spain. As far as we are concerned, outgoing to the UK will be better as we can expect a drop on UK tour prices off about 10%.”

Balian added, “Another impact will be on the low cost companies operating in Europe: Ryanair, Easy Jet. Unless bilateral agreements are signed, they should not be allowed and will not probably be allowed (except specific bilateral agreements) to operate local flights in European countries other than England.”

Pundits, though, have already begun speculating about whether Brexit will really happen. In any case, one thing appears certain – the UK’s inbound (better prices for visitors) and outbound travel (reduced purchasing power of UK citizens) will be impacted. Back in February 2016, Euromonitor, the world’s leading independent provider of strategic market research and ATTA partner, published a piece in its Passport report, “In or Out? Potential Impact of Brexit on UK Travel and Tourism,” which is as relevant then as it is today, days after the vote:

“There will be a threat to outbound tourism as travel abroad becomes more expensive, which would impact airlines and intermediaries especially, with easyJet’s Carolyn McCall one of many voicing concerns about the negative effects Brexit would have on not just their business, but on the overall airline industry in Europe, making air travel much more expensive,” writes Caroline Bremmer in the report.

She continues: “Following a potential Brexit, a period of introspection is likely to occur as the British people come to terms with their new independence and future role in the world…To move forward and transform the UK as a destination, a process of creative destruction of previous national tourism strategy will be necessary and the national tourism board would enter a stage of crisis management in the short term, and would then need to develop a destination brand recovery strategy to help overcome longterm reputational damage to its brand.”

“It’s uncertain whether Brexit will actually happen, said Lukasz Warzecha, who heads LWimages Studio in the UK. “We have no ready-to-act government and the referendum result is not legally binding for the British Parliament. Of course it needs to be taken into consideration but with 48% being against the democratic process will have to continue.” When asked about immediate concerns and next steps for this company Lukasz offered, “Stability. Healthy business environment needs stability and this will be a number one priority for our operations in the coming months. I would like to believe that UK government and the Chancellor will do exactly the same.”

According to those interviewed, the sooner the exit takes place, most believe that it will be better for Europe in general and can help bolster European consumer confidence. If negotiations are prolonged, then consumer confidence throughout Europe is likely to suffer. And, if the Sterling Pound continues to take a hit, its movement could also bring down the Euro, possibly affecting tourism throughout Europe.

With the exception of some pricing adjustments among the private sector, most ATTA members (public and private alike) are taking a “wait and see” approach for the near future. Like many others with whom I’ve spoken with here in Europe since Friday, I’ll be waiting with bated breath.

2 Comments to Brexit’s Impact to European Tourism: ATTA Member Insights

  1. Thanks for this Myles
    Ireland has already seen some interesting movements due to Brexit. Since the vote there has been 50,000 new applications for Irish passports. so maybe we could call this as passport tourism?

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