OK, so Thursday’s vote in the United Kingdom was a bit of a surprise. Who would have thought they would have voted to leave the European Union? The markets reacted (as they should) and collectively people seemed to panic with a “what now” attitude. David Cameron, the Prime Minister resigned (as expected) and if you listened to most media, the world was in a financial free-fall because of Brexit. But, maybe not so much!
Certainly, there are financial ramifications and we all will likely see some impact on our 401k’s and our retirement accounts—just as others across the globe do when the US markets slide… or the Asian markets slide… or the European markets slide. They will recover. The world financial markets have always had their ups and downs for various reasons and they always recover. Many have likened this drop to 1987. On Black Monday, the Dow Jones fell 508 points to 1,738. Today, almost 20 years later, the Dow Jones stands at 17,400—and that was AFTER a 600-point drop. So, with some time, all is not lost. In fact, for the travel industry, there is likely a dual-edged opportunity.
Sell the United Kingdom. Brexit has not changed anything in the way of tourism to the UK other than it is now a lot less expensive. This time last year, the Pound to Dollar conversion was nearing $1.60. This year, it is expected to remain under $1.40. That is a significant savings to your customers. A UK tour last year might have cost $4500—this year you are at $3900. What could $600 extra buy? Maybe it’s a flight to the UK? Maybe it is some spending money while there? Maybe it is an upgrade in accommodations? The possibilities are endless. And do not forget, your clients’ UK spending will now be more affordable. Now, you might be able to head into Harrods and actually shop instead of browse.
The financial pinch is going to affect UK citizens more than US ones. By increasing our focus on the UK, we are sitting in the catbird seat. We are in a position to create demand for a product and we are able to help our UK partners in tourism by sending clients and helping them to remain as solvent entities.
If you are not currently thinking about Britain, you should. History, culture, arts, cuisine, and much more await your clients. Get on the stick.
At TRO, we are lucky to have a few different insights into the whole Brexit situation. On Tuesday, one of our Travel Agent Diary authors, Vincent Soriano will be discussing the impact on his business which is based in Europe. Also, Paull Tickner, a tour operator in the UK will be chiming in on Wednesday in the Point To Point column. Stay tuned!