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Inntel shares thoughts on what BREXIT would mean for us

"There’s no escaping the one question that is being asked everywhere and of everyone, whether you’re gathering around a board room or a kitchen table.  For those in the meetings and travel industry it is particularly concerning as we are likely to be dealing with the aftermath of the vote from the word go." Douglas O’Neill, MD, Inntel

“Que sera, sera. So whatever happens, let’s look on the bright side.”
According to the recent poll taken for the YouGov EU Referendum Tracker (between 12-14 April 2016) the vote could be close, with 40% of those polled saying they will vote to stay against 39% to leave. Many reputable sources have suggested that BREXIT would be little short of a disaster for the UK travel industry, most notably the joint ABTA/Deloitte report (published 14 March 2016).

In reviewing this and other opinion pieces Inntel has tried to find a positive alternative message to counteract the widespread doom and gloom. Not because we are for or against BREXIT. It’s simply that while we can’t predict or control the outcome, we can prepare ourselves to live with it.

A report in The Telegraph (What Leaving The EU Could Cost Travellers, Nick Trend, 18 February 2016) suggests that life will become “more expensive, more difficult and generally less pleasant” than before. Many reasons are cited, the first concerning air fares and the suggestion that no-frills airlines will not be able to offer low-cost flights to the continent if we are not part of the single aviation area. Another suggests that EU countries work well together to deal with crises such as the Tunisia terrorist attacks, and our holidaymakers may not be as safe without this umbrella protection. The access to emergency healthcare provided under the European Health Insurance Card (EHIC) arrangement would also need to be renegotiated, which could affect the cost of travel insurance, and mobile phone roaming charges (which are due to be abolished across the EU in June 2017) may rise if we are not covered by the agreement.

Time for some positive thinking
Low-cost flights go two ways! EU countries may want to preserve the progress that has been made in reducing airfares for their own citizens, too.  Meanwhile Willie Walsh, Chief Executive of BA parent IAG (International Airlines Group) has said that in his considered opinion leaving the EU would not have ‘a material impact’ on the company. Disasters such as the Tunisian crisis affect us all at a humanitarian level (no man is an island) so is it really likely that some people would be offered less care and support because their home country is not in a particular economic zone?

The EHIC card entitles you to medical treatment in the European Economic Area or Switzerland under the same terms as the people in the country you are visiting. If there is an agreement already in place with Switzerland, then there is already a precedent for the model working with a non EU country. And surely the countries that ARE in the EU would be keen to retain an arrangement that gives their own citizens access to NHS services while they are here?

As to the roaming charges crisis – one solution that springs to mind is to use a local SIMM card wherever you go. UK travellers already buy foreign currency when they head abroad, so it’s not such a huge leap to pick up a foreign SIMM card too. Over time we may see them lining the walls in every Bureau de Change!

Turning to an article for Euromonitor (In or Out? Potential Impact of Brexit on UK Travel and Tourism, 29 February 2016), the author Caroline Bremner tells us that while the current slide in the pound brought about by uncertainty over Brexit makes the UK a more attractive place to visit (of the 34 million inbound visitors forecast for 2016, nearly 22 million will come from Europe) any additional border controls would have a major impact on business and tourism. The predicted exodus of global corporations from London would also undermine the thriving business travel market (and its associated income) and the National Tourism Board will be forced into a period of crisis management.

Looking on the bright side
According to Euromonitor figures, London is extremely popular with the world’s tourists, being the second most-visited city after Hong Kong, and it is unlikely they are all coming to see our beautiful banks and business HQs. The Tourism bodies will therefore have plenty to work with when it comes to promoting Destination London.

With regards to border controls, the UK is already running its own border operations differently to other EU countries as we are not signed up to the Schengen Agreement.  All travellers arriving in the UK undergo passport and identify checks – bar none – and even those from EU countries are refused entry if they do not have valid identity documents. Therefore it could be that any ‘tightening of the border controls’ would be designed to tackle known loopholes, and not to reinvent a system that is already more rigorous than elsewhere.

In an article written for Big Hospitality (How a Brexit Could Affect the Hospitality Industry by Martin Pryke, 21 March 2016) the author claims that a Brexit would make it harder to attract skilled labour from across the EU due to the additional burden of arranging work permits. (On a more positive note, he does suggest that if travel fares to EU countries increase following Brexit we may see a rise in the number of families opting for a ‘staycation’ and spending their holiday money in the UK!). However, in a later Big Hospitality report (Brexit ‘good for business’ says third of independent foodservice operators, 6 May 2016), 56% of the 211 foodservice companies surveyed believed that a Brexit would help to ‘cut red tape’ and 65% felt it would not leave them with recruitment problems.

Making light work of heavy burdens
Many tasks that would once have been considered ‘administrative burdens’ are now relatively quick and easy to organise online. Renewing your car tax used to involve finding your paperwork and joining the queue at the Post Office. Today you just enter your reference number and payment details and the computer says ‘Yes’. Similarly, we can book flights, hotels and hire cars as part of the same transaction, and read foreign websites by clicking the ‘translate’ button. We can therefore hope that any new work permit processes could also be facilitated by technology.

Turning then to the major industry research piece, it appears that the much quoted ABTA/Deloitte report (What Brexit Might Mean for UK Travel, 14 March 2016) is the original source of many of the warnings that are being repackaged and reposted. The report starts from the position that, while we can’t know exactly what will happen following a Brexit, we can at least look to see how the UK travel industry has benefited since joining the EU to hazard a guess as to how things will change once the relationship is over.

Sad to say, it does read as a tale of far-ranging misery to come. The six key findings can be summarised as:
• Both the UK and EU have benefited from the free movement of goods (between them) and therefore both are likely to be affected should this free movement cease.
• The period of uncertainty following a Brexit could last for years while new trading rules and regulations are hammered out.
• If the UK does not transition quickly to the new arrangements the value of the pound could suffer.
• To maintain consumer confidence, EU regulations governing travelling consumers would need to be replaced with equally robust UK regulations.
• Leaving the EU could hamper our ability to recruit and employ workers from the EU and elsewhere, which could create problems for UK travel and hospitality businesses.
• If the value of the pound falls significantly it will be more expensive for UK citizens to travel and holiday abroad and insurance costs will need to rise to replace the EHIC scheme cover.

On the other hand!
Some of these concerns have already been commented on elsewhere. As to the rest: If both the UK and EU have benefited from the free movement of goods, it is in the interest of both parties to preserve the mutually beneficial terms as far as possible (and where there’s a will, there’s a way).

New trading rules and regulations may need to be “hammered out”, but we won’t be starting with a blank sheet of paper. The terms that have been negotiated with other non-EU members in the past (such as Switzerland) could be the starting point. The fact that both the UK and EU have had such healthy trading patterns in the past should mean that neither side will want to drag its feet.

The demand for ‘robust UK regulations’ is at the heart of the argument for those pushing for a Brexit. Presumably the idea is that the best of the EU regulations would be quickly adopted as the UK’s own. No-one appears to be championing change for change’s sake.

Damned statistics ...
On a final note, some of the statistics quoted in the Deloitte report could be used to present the alternative argument to the actual findings. For example, if 76% of UK holidays are spent in EU member states (based on 2014 figures), is it likely that the EU members would conspire to make life difficult for such a large number of UK tourists to travel to and spend money in their individual countries? Similarly, as the UK is the third largest importer of European goods and services, would the EU not be swift to make any required changes to rules and regulations to protect such valued custom?

In conclusion
At the end of the day the alarming prophecies and frightening statistics still amount to nothing more than speculation because we just don’t know. In the meantime, all we can do is remind ourselves that whether we remain or leave the EU, nothing will stay the same. Industries are always evolving to keep pace with the changing times. The only issue is whether this time round the evolution will be a step change rather than a gradual process.

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