Brexit casts cloud over British holidaymakers’ plans

The Brexit[1] effect is beginning to cast a shadow over a traditional aspect of British life: holidaymakers' pursuit of European sun. With concerns rising about a no-deal Brexit that could involve border delays, the travel industry is reporting that UK consumers have changed their behaviour in recent weeks. Data from the research group GfK show that summer bookings for overseas holidays from the UK were rising until the last week in January.

But since then there have been falls of 9-10 per cent when compared with the same weeks last year. Weaker demand is also eating into operators' margins. Travel website TravelSupermarket reported last week that prices of Easter package holidays have on average fallen by nearly a quarter compared with 2018.

A three star holiday for a family of four to the Algarve that cost GBP698 last year can now be found for GBP462. The travel industry is at pains to reassure holidaymakers. Thomas Cook's dedicated Brexit Q&A webpage[2], which launched in December, receives on average 800 hits a day.

Eurotunnel has sent out emails to travellers to say it was "Brexit-ready". Potential travellers do not seem wholly convinced. According to Peter Fankhauser, Thomas Cook chief executive, "customers appear to be putting off bookings because of concerns about Brexit".

Nick Varney, chief executive of Merlin Entertainments, which runs tourist attractions such as Madame Tussauds and Legoland, agreed that Brexit is deterring Britons from holidaying abroad. "It's a certainty," he said. "The benefit for us of a weak pound is that Brits stay at home and foreigners come." Here is how holiday habits have changed.

France

The well-publicised pinch point of the Dover to Calais route has caused some travellers to think twice about the risk of border queues. Eurostar would not comment on its forward booking figures but Brittany Ferries reported that bookings to France for March and April were down 9.7 per cent compared with the same periods last year.

These months are particularly important, since Britain is scheduled to leave the EU -- with or without a deal -- on March 29, just before the Easter holiday period begins. However, Britain may ask for a delay -- an issue on parliament's agenda next week -- which could push back the date of Brexit, and any attendant problems at the border, until the summer. Lastminute.com, the travel website, said bookings to France for the March to June period, had fallen by 11 per cent compared with the same period in 2018 -- although it suggested that the gilets jaunes protests that have rocked the country may also have deterred visitors.

Spain and the southeastern Mediterranean

British tourists still want Spanish sunshine.

Lastminute.com said bookings for Spain for the April to December period were up almost 35 per cent on the same period last year. But older customers have been looking beyond Europe. In an interview with trade magazine Travel Weekly, Paul Hardwick, retail manager of the London-based agent Fred Olsen Travel, said that most of his company's customers -- whose average age is above 60 -- were choosing cruises and long-haul over European package holidays.

British holidaymakers in Benidorm, Spain (C) Bloomberg

Kuoni, which offers premium holidays that cost thousands of pounds, said that its short-haul sales to Europe were down 10 per cent, while long-haul trips to other parts of the world were up.

This trend may be linked to the status of the European Health Insurance Card, which currently entitles British citizens travelling in the EU to state medical care in member states. If Britain leaves the bloc without a deal, the card will no longer be valid, potentially confronting some older travellers with high insurance premiums for medical cover.

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But some countries have benefited from hesitancy over booking holidays in western Europe. According to ABTA, a trade body, bookings for Turkey so far this year are up 42 per cent on 2018, while sales to Egypt have risen 39 per cent, as customers look for affordable beaches without the worry of cancellations due to Brexit. Bookings to Bulgaria, where resorts are also more competitively priced than in the euro area, have risen 22 per cent.

Poland has also enjoyed a currency-related boost, with bookings for hotel and flight deals between March and June up 51 per cent on last year, according to lastminute.com

The UK

The heat of last summer, when UK temperatures climbed to 35 degrees centigrade, may have encouraged those worried about border chaos to stay at home. But so far evidence is scant. According to ABTA, 59 per cent of customers intend to take a domestic break.

This is down from 66 per cent last year -- although it may be symptomatic of a broader trend of consumers putting plans on hold amid the Brexit uncertainty.

Meanwhile surveys for VisitBritain, the UK's official tourism website, found that interest in continental Europe in travelling to the country has fallen from 72 per cent in August 2016 to 65 per cent in autumn last year.

Forward flight bookings from mainland Europe to the UK for the February to July period are down 3 per cent from the same period last year.

References

  1. ^ Brexit (www.ft.com)
  2. ^ Brexit Q&A webpage (support.thomascook.com)

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