Last Year was a Robust Year for the Industry: Despite last June’s referendum vote to have Britain exit (“Brexit”) the European Union (EU) and the subsequent slide of the British pound sterling from $1.48 to $1.22 (a decline of 17.5 percent), it was also a year during which Britons who were skittish about traveling outbound to neighboring short-haul destinations such as France and German because of concerns over safety and security, headed across the English Channel in healthy numbers. In fact, it was a historic year for outbound travel by UK residents, according to the UK Office for National Statistics (ONS).
Some info bytes from recent ONS reports on outbound travel from the UK:
—There were 70.8 million visits overseas by UK residents in 2016, the highest figure recorded by the IPS.†
—The year-on-year quarterly growth in 2016 varied between +11 percent (Q1) and +4.7 percent (Q2). This was slightly lower than the growth in numbers of visits seen in 2015 but higher than in 2014 and 2013.
—Earlier this year, ONS said that UK residents made some 8.8 million visits abroad in the first two months of 2017 vs. 8.5 million for the same period in 2016—an increase of 3 percent (it should be noted that traffic was down by 2 percent in February 2017 vs. February 2016).
—The USA remains the favorite long-haul international destination of choice for Britons.
Two Notes:
- The ONS full-year report came out as the UK is in the midst of a general election called by the government of Prime Minister Theresa May for June 8th. May succeeded David Cameron who resigned last June 24 in the wake of the June 23rd Brexit referendum, which won with just 52 percent of the vote. (It is merely coincidence that last year’s vote was on the final day of IPW 2016 in New Orleans while the upcoming general election vote takes place on June 8th—the next day after the final day of IPW 2017 in Washington, D.C. Polls suggest that the May government should win enough seats to maintain control of Parliament—although their lead over opposition parties is narrow.
- The election notwithstanding, most travel and tourism industry analysts are cautious about linking the industry’s near-term future in the UK. The consensus is, instead, that currency exchange rates are what matter most. And in this instance, the outlook is almost reassuring—considering that the British pound sterling, which fell from $1.48 to a 30-year low of $1.22 in the four months following the Brexit vote, and has since crawled back up to $1.30. Seven months ago, the Telegraph, in an Oct, 11, said, “The average analyst thinks the fall in sterling is probably over. The market consensus is that the pound will stay at roughly $1.28 for the next six or nine months, before edging up to $1.30 in the second half of 2017 and creeping up over the next few years, ending up back at $1.48 in 2020.” It was $1.48 on the day of the June 23, 2016 Brexit vote.
†The International Passenger Survey (IPS) collects information about passengers entering and leaving the UK, and has been running continuously since 1961. The IPS conducts between 700,000 and 800,000 interviews a year of which over 250,000 are used to produce estimates of Overseas Travel and Tourism. The study results are used by various government departments, including the Office for National Statistics (ONS), the Department for Transport, the Home Office, HM Revenue and Customs, VisitBritain and the national and regional tourist boards.
