60 Seconds. Holiday Market Post Brexit:
1970s here we come? UK arcade holidays beckon as Med becomes more expensive?
Events post 23 June:
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Fears of terrorist incidents aside, Sterling’s fall has been the main news
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Sterling buys c12% less vs Euro & 17% less in US$s than previously
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This will impact ‘brochure’ prices in due course. Fuel will also be hedged for a while but ‘in resort’ costs rose immediately
Where we are now:
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Art.50 hasn’t been triggered yet, talks may start in the Autumn
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Sterling could move either way. Ditto oil but, if UK inflation picks up, Sterling may slip further
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There’s no clarity on issues such as health cover in the EU or on the need (or not) for visas
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A visa-waiver scheme may be introduced, which costs money.
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We can be sure that travel with borders will not be as seamless as travel without
Early signs:
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Outbound: Thomas Cook made a ‘solid start’ (quarter to Dec)
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Holidaymakers are paying more (prices are +4%) so will have less to spend in the UK
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Inbound: Merlin said summer 2016 visitors to London weren’t spending
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It later revised this, saying November & December were markedly better
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STR concurs. The London hotel market is better. This benefits WTB, EZH & others
The $64,000 question:
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Do price adjustments change spending habits?
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Do consumers swap Benidorm for Blackpool – or do they scrimp in the UK & head for the Med?
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It could well be the latter. There could be a win-win in the short term.
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Overseas & domestic holiday volumes could both rise with savings coming from postponement of big ticket spend. But this will not be sustainable over the longer term.
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