Apart from the mayhem caused by the infamous Brexit or the British Exit, the European Union (EU) is now in the process of assessing the financial multiplier effect of this move to the socio-economical tourism industry in the affected parts.
The implications, as expressed by experts, cannot be more timely as the Brexit also happened just when the peak travel season is underway. To most of the affected EU members, this can mean that a huge wave of changes is about to take center stage.
International Travel Cost Analysis
For the majority of travelers from the West, Britain and Europe are the most frequented destinations. As a result of Brexit, traveling will be much cheaper in the coming months. Last June 24, 2016, the exchange rate against U.S. Dollars was as follows:
- Great British Pound (GBP) £1=$1.38
- Euro €1=$1.11
The decline could go even lower as the full extent of Brexit’s effects is yet to be fully realized.
Effects on Locals and Foreigners
The Washington Post reports, “Nearly 10% of tourists in Britain last year came from the United States [citing government statistics] and Americans spent more than any other nationality—an average of £3,010, or $4,418.” With the sharp downfall of the purchasing power of the EU currency, these current figures are expected to increase—which can also be a good thing in the long run as the implications start to self-repair.
But, for the local British and European travelers, enjoying a fortnight will be much more expensive in their side of the spectrum where food and accommodation would cost a little extra.
The Euro to Pound rate is crucial to the cost disparity and dependency for the local people. Since the British takes the majority of their holidays using only a single currency, they’re bound to experience the brunt of the economic impact. On one end, The Independent reports that the U.S., Dubai, and China will experience the highest gain as a result of this event.
Traveling Inclusions Bound to Be Affected
Other than the local increase in commodities, the EU people might also experience an international outpouring of the currency changes. Since the oil and airline transportation industries are priced in dollars, any further fluctuation in the GDP can make airline flights costlier overall.
The Current Inflexibility of EU Travel Industry
One of best things about the European mileage is their policy, which allows EU airlines to freely fly between two points. But, this policy might soon face reprieve as the top-level management and analysts push for plans to mitigate the Brexit effect.
In light with the strong Brexit conclusion, Evening Standard says, “It is likely that airlines will restructure into separate UK- and EU-based corporate entities, adding complexity and cost, and reducing flexibility.”
New service agreements that will come from the changes will undoubtedly raise the airline prices; thus, making it harder for the locals to travel within their territory.