Following Boris Johnson’s elevation to the role of the UK’s Prime Minister, the pound has declined in value again.
According to the New York Times, the pound has lost nearly 3 percent of its value against the dollar and the Euro, falling to $1.2151 on Tuesday afternoon, reflecting market fears that Johnson’s taking over as Prime Minister makes a “no-deal” Brexit more likely on the latest Brexit deadline, which is October 31. In terms of travel, a weak pound raises costs for Britons heading aboard, leading to a decrease in international travel out of the country.
In terms of inbound travel, however, a weak pound lowers prices for travelers from the United States and elsewhere looking to take a vacation in the UK. In 2017, shortly after the vote to leave the European Union (EU), a similar slide in the pound led to an 11 percent jump in overall international visitation to the country, and a 19 percent increase in visits from North America.
Looking ahead, according to an analysis in The Guardian, a deal to avoid a no-deal Brexit seems “increasingly unlikely” as Johnson and his ministers have demanded terms, such as scrapping a backstop for the Irish border and a new withdrawal deal, that the EU had previously rejected. A “no-deal” scenario means that the UK would leave the EU on October 31 with no special trade arrangements in place; while the exact impact is unclear, economists have pointed to sudden tariffs, delays at border checks and the need for UK businesses to apply for customs, excise and value-added tax procedures as likely negative consequences. One other scenario raised by The Guardian: Parliament blocking a no-deal exit (although it is unclear how they would do this), allowing Johnson to call a general election as “the self-styled champion of Brexit.”
If the UK does leave the EU without a special agreement in place, both the United States and the European Union have deals in place to allow flights to and from the UK to continue. The U.S. signed its agreement in November, and the EU followed in March.
Other research has suggested that travel could remain resilient following Brexit as well.
One study by MMGY Global found Millennials to be particularly optimistic,
planning to take 40 percent more trips this year and the majority believing that any impact on passport control lines, exchange rates and airline fares would be more positive than negative.
Additionally, recent research from the World Travel and Tourism Council (WTTC)suggests that the travel and tourism industry could see major growth post-Brexit, potentially helping to drive the UK’s economic recovery. That is because the UK travel industry’s growth rate in 2018, at 1 percent, was well below the worldwide average of 3.9 percent, which the WTTC attributed to uncertainty over the Brexit deal. Since the growth rate has been so low, there is a great deal of potential for growth once Brexit details are finalized.
One scenario to watch out, for, however: some ways in which the UK might leave the EU, including without a deal in place, could lead to the imposition of a “hard border” between Northern Ireland and the Republic of Ireland. Some commentators have suggested that a harder border could “damage the spirit” of the Good Friday Agreement, a peace accord that followed a period of violence in Northern Ireland commonly called “The Troubles.”
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