Brexit driving UK tourism flows from and to Europe
The UK / EU Withdrawal agreement built around UK Govt. “red lines” and EU Commission policy is still awaiting ratification by the UK Parliament. The difficulty in gaining a majority for ratification and in particular a future trade deal has led to a political crisis in the UK, combined with an enormous constitutional struggle. This level of political crisis, against a backdrop of economic uncertainty, is destabilising the UK internally and threatening its relations with its closest neighbours in the EU. What will be the potential consequences for its geopolitical position and its economy and in particular for tourism flows between the UK and Europe?
Political commentators, notably Robert Cooper of the Financial Times, argue the political system crisis going on in the UK is a result of a fundamental lack of understanding in the UK of how the EU works and what it stands for. Many imagined that pure economic interest would drive talks between the two parties. The thinking was that economies with large markets within the UK would influence the Commission to give ground in negotiations with the UK at some point. In fact, the political and economic integrity of the Single Market and the International legal requirements to abide by the Good Friday Agreement have been the dominant factors. Many, especially of the Leave side of the argument in the UK, had not realised this would happen, despite the Commission being open about its priorities from the start. This is evidence, says Cooper, of a concerning misunderstanding of why the EU was set up in the first place.
“The EU is a political project: the customs union and the single market are means to an end.” Robert Cooper.
Equally concerning under these circumstances, is a political system in the UK based on adversarial party politics? The combination leaves the UK with no Parliamentary majority as yet for a Withdrawal Agreement or a new trade deal with the EU. In addition, increasing numbers of UK citizens wish to stay in the EU and the backlog of other issues on the domestic political agenda starved of attention grows. What will be the consequences for social cohesion in the UK, for relations with EU neighbours and for tourism flows between Europe and the UK?
Economics and tourism
All major reputable economic forecasts indicate that the UK economy will contract in the event of a no deal scenario becoming reality, to the tune of anywhere between 5-10% of GDP. The uncertainty regarding the basis of future trading between the UK and mainland Europe is widely acknowledged as damaging to inward investment to the UK and has already resulted in losses for the UK economy. Tourism, however, has benefited from the devalued pound making UK cheaper as a destination. According to figures from VisitBritain, 2018 saw a 6% increase in inbound Tourism to the UK to over 41M tourists and an increase in the amounts spent by tourists. In terms of its image abroad (nation Brand), the UK has retained its third place behind Japan and Germany (Anholt Index, 2018). The publicity, resulting from very successful Olympic games in 2012, has played a role in promoting the UK and in combination with cheaper pound tourism has benefitted. It remains to be seen whether the economic storm clouds gathering as a result of a potentially messy Brexit will affect this positive image and trend for UK tourism. What is likely though is that fewer British will be visiting mainland Europe if the pound stays where it is or devalues even further against the euro. More importantly, continued uncertainty will not enhance UK relations with EU countries and may damage the nation brand and tourism in the long run.