How Will Brexit Affect Your Holiday?
Are You Taking A Holiday To Post-Brexit Europe This Summer?
The referendum result is in and the UK has chosen to leave the EU. But how will the vote and the weakening of the pound affect your holiday overseas this year?
The decision by the UK voters to leave the European Union has caused much speculation as to what will happen next. Deals need to be renegotiated, the stock market has taken a nosedive and the country needs a new Prime Minister. But what is the effect of Brexit on the holiday industry?
In the short-term, the biggest impact on UK holidaymakers will be the weakening of the pound against the two major currencies of the Euro and the Dollar. Due to our location as an island which doesn’t have the best relationship with the weather, many Brits choose to go on holiday to parts of Europe, such as Spain and Portugal. There have been a huge increase in the number of bookings to these countries this year, as they are considered safer in terms of terrorism than resorts in formerly-popular Egypt or Tunisia.
However, now that the Pound has weakened against the Euro, a holiday on the continent will hit your wallet much harder than it did previously. The cost of every aspect of your trip will increase, including hotel accommodation, food, drinks and sightseeing tickets. For instance, if you were planning on taking a trip to Barcelona this summer, everything will have increased by approximately 15-20%. The cost of a pint of beer is now around £2.06, a meal for two will set you back around £40 and accommodation in a mid-range 4* hotel might be in the region of £100-150 per night.
Travel Companies Hike Prices
Tour operators will also be hit by this increase in costs. If you have put down a deposit on a package holiday, then ABTA allows travel companies to hike up their prices and apply surcharges to cover their costs. They must swallow 2% of the increase themselves, but if the price of your holiday increases by more than 10%, then consumers do have the right to cancel a booking.
As yet, we haven’t seen an increase in flight prices from budget companies such as Easyjet or Ryanair. However, flight operators will most likely be affected by the Sterling-Dollar rate. When the Pound falls, these companies have to pay more for fuel and consequently they pass on these costs to air passengers. UK travellers have been able to fly to a multitude of destinations in Europe at an incredibly low cost for the last couple of decades. Brexit may make this a more difficult and expensive option.
Citizens of the EU have been entitled to medical treatment in Europe so long as they hold a European Health Insurance Card (EHIC). EHIC future has not yet been decided and the outcome will be detertmined when the desicion is made whether we stay in the European Economic Area.
The Rise Of The Staycation
The Brexit result is likely to have a positive impact on the UK holiday industry. As travellers are hit by the crash of the Pound, they are more likely to stay in the UK and spend their money in British holiday towns and resorts. This takes away the expense of flights and allows us to build back our own economy. If you’re holidaying in the UK make sure you take out some UK travel insurance.
It has been noted by market specialists that the pound has now stabilised somewhat following the immediate aftermath of the Brexit result. Watch this space to see what happens next!