Article 50 has been triggered, and unless the UK undergoes a drastic change of leadership following the June 8th General Election, Brexit will become a reality. Many Britons are already feeling the effects of the UK’s departure from the EU thanks to the falling value of the pound against such global currencies as the Euro and the US dollar, but what impact is that having on our day-to-day spending habits?
The value of the British pound has dropped roughly 15% lower than that of the US dollar and 12% against the Euro between the announcement of the EU referendum and confirmation that Article 50 would be triggered. The tourism industries have felt the biggest impact of this, as more and more Brits are deciding to embrace the principle of the staycation; holidaying within the British isles, as opposed to packing their suitcases and jetting away to sunnier climes for a fortnight. International travellers from both sides of the Atlantic have also flooded the UK seeking bargains as their own currencies perform admirably against the pound, which is a welcome relief for our domestic economy; as the Tourist Alliance explain, visitors account for over 7% of the UK’s incoming funds.
Let’s take the recent Easter break as an example of changing habits for British holidaymakers. Where many families may have previously embraced the opportunity to head over the Channel Tunnel into mainland Europe for the long weekend, it was reported by the British Tourism Board that an excess of six million Brits instead opted to take an overnight stay within these shores, bolstering the economy closer to home. This trend began with the 2016 August Bank Holiday, the first nationally syndicated break since the results of the EU referendum were announced, and seems set to continue.
This is hardly surprising when we consider the realities of currency exchange in the first quarter of 2017. At the time of writing, one British pound equals approximately 1.19 Euros – during Q1 of 2015, we could get closer to 1.35 Euros for our pound. With the cost of imported goods and services also rising following Brexit, we’re being increasingly cautious as to where we spend our comparatively limited disposable funds.
Fortunately, there are a plethora of options for holidaymakers within the UK, negating the need to travel overseas. Take the popular chain Center Parks as an example; the company have published their annual report for the 2015/16, and as you’ll see, they have enjoyed a steady increase of visitors over the past year – but the plans for a new site in Ireland on the County Longford site of Longford Forest could now cost up to €35million more than originally forecast thanks to the sharp exchange in fortunes of the pound and euro currencies.
Owners of traditional family holiday destinations such as caravan parks have also experienced a boom since Brexit was announced, with investor groups prepared to gamble on more and more UK holidaymakers shunning overseas climes in order to stay within the British Isles and ensure that their money stretches further.
One British pound equals approximately 1.19 Euros – during Q1 of 2015, we could get closer to 1.35 Euros for our pound. With the cost of imported goods and services also rising following Brexit, we’re being increasingly cautious as to where we spend our comparatively limited disposable funds.
There is still a great deal of uncertainty surrounding the British pound and the impact that it will have on plans for holiday destinations throughout 2017, although some experts do predict an uplift in the currency’s fortunes over the course of the year. The Association of British Travel Agents project “a positive outlook, tempered by caution and uncertainty” for the remainder of the year, though they do list a number of international destinations as popular choices for the Brits who are willing to travel.
The fate of the pound against its strongest competitors, the Euro and the US Dollar, remains to be seen and is almost certainly tied to results of the impending General Election. Whatever the outcome on June 8th, it should be an interesting time for anybody planning a getaway – be that within the UK or further afield.
Written by Bev W