Summary:
- A slowing of growth in the travel and tourism sector in the UK could provide a platform for economic growth in a post-Brexit environment, suggests the WTTC;
- The UK remains the fifth largest travel and tourism market in the world, but grew just 1% in 2018 and is forecast to rise just 1.4% in 2019;
- New research from STR suggests Brexit has had little impact on 2019 travel plans but has shaped a negative perception of the UK among European travellers.
The fact that the sector contributes 4.2 million jobs in the UK demonstrates "the importance of the sector to the social fabric of the country," according to the WTTC and adds some perspective to the low level of growth recorded in 2018.
Its internal research shows that although the UK travel and tourism sector remains the fifth largest in the world, its 2018 growth rate of 1% was significantly below the European Union average of 2.7% and the world average of 3.9%. The latter was influenced by particularly strong growth from the likes of China (7.3%), India (6.7%) and Thailand (6%).
The UK's travel and tourism economy of GBP234 billion in 2018 was considerably below both the United States of America (GBP1,200,436 billion) and China (GBP1,135,885 billion), but not far behind the third ranked Japan (GBP276,705 billion) and fourth ranked Germany (GBP259,497 billion) and kept it ahead of Italy (GBP206,895 billion), France (GBP199.997 billion), and Spain (GBP158,789 billion).
The weak performance was influenced by a notable decline in spending by international visitors, which dropped 9.7% from GBP31.5 billion in 2017 to GBP28.4 billion in 2018. With continued uncertainty over the Brexit process this will certainly have a continued impact through 2019, but WTTC forecasts a slightly improved performance for the year with a 1.4% growth. This is still markedly down on the predicted global (3.6%) and European Union (2.4%) averages.
But, WTTC sees travel and tourism as one of the major sectors to drive a recovery in the British economy in a post-Brexit environment and Gloria Guevara, president & CEO of the global body says with its current growth rate of 1% dramatically below the 6.2% recorded the previous year "demonstrates the huge potential of our sector to be a driver of economic growth"
Meanwhile, the findings of a recent survey conducted by STR's Consumer Travel Insights team suggests Brexit has had little impact on 2019 travel plans but has shaped a negative perception of the UK among European travellers. The results show indications that some travellers "will adjust their behaviour" due to Brexit, the overall impact of Brexit on consumer travel plans in 2019 and beyond "looks marginal," says the benchmarking specialist.
Almost two-thirds (61%) of respondents said Brexit was not impacting their 2019 travel plans, while just 11% answered "yes" it was. Around one in ten UK travellers (9%) and European (10%) travellers stated that they were less likely to travel, while 17% of travellers from the rest of the world stated they would be less likely to travel to the UK in the future due to Brexit. However, more than one in three UK travellers (33%) and European travellers (36%) thought it was best to avoid travelling in late March and early April when the UK may formally withdraw from the European Union.
As the UK reaches the final month before its scheduled exit from the European Union on 29-Mar-2019, considerable uncertainty remains over the nature of that departure. Three outcomes remain possible: departure based on an agreed withdrawal deal, a no deal exit, or a delayed exit.
Brexit based on an agreed deal would preserve all existing arrangements for a transition period to the end of 2020. In the case of the aviation industry, airlines would retain their current market access and safety regulation and have time to reach a new comprehensive air transport agreement (but that might not be quite as liberal as it is today). Under a no deal scenario, the UK and EU look likely to agree a 'bare bones' air transport agreement to preserve some market access and to extend safety regulation for a while.
A new report from CAPA - Centre for Aviation investigates the current - but quickly changing - Brexit situation and how in particular it will impact the aviation sector. "Brexit is still raising questions and uncertainties for the aviation industry in the UK and the EU. Uncertainty will continue to cloud Europe's aviation landscape for some time to come - whatever the situation is on 30-Mar-2019," it warns.
READ THE FULL REPORT: Brexit and aviation: clouds of uncertainty remain as flybmi winds up (subscribers only)