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Post-Brexit, UK Residents Are Changing Travel Plans 

Johannes Jacobi 

 

Johannes Jacobi

3/15/2017 

UK travel agents tell Grassroots℠ that the 2017 travel season is off to a good start, but plans are changing. Among the top reasons cited: a weaker British pound, political uncertainty and security concerns in previously popular destinations like Turkey.


Brexit takes a bite out of travel

Although the UK has not yet officially exited the European Union, the June 2016
Two-thirds of respondents said short-haul bookings have increased, particularly to Spain
Brexit vote has already affected UK residents in a range of ways. GrassrootsSM Research recently interviewed travel agents throughout the UK to see what kind of insights could be drawn from consumers' holiday plans.

When we asked about the booking trend for short-haul travel destinations, which are predominantly European, two-thirds of respondents said they had more bookings for 2017 than they did during the same period last year. Several agents told
Half of our respondents said long-haul bookings were down, primarily due to currency fluctuations
us that short-haul European trips – particularly to Spain – are perceived as safer than countries such as Tunisia, Egypt and Turkey, which were previously popular with holiday-makers. One-third of the agents we contacted said short-haul bookings were flat or had fallen, generally due to negative post-Brexit pricing caused by a weaker British pound.

Currency fluctuations and faraway destinations

When we asked about long-haul destinations, almost half of the interviewed travel agents said 2017 bookings were up, with those travelers finding better value in far-away locales than in Europe. Yet an almost equal number of sources said long-haul bookings had moved lower due to exchange-rate fluctuations, post-Brexit political uncertainty and security concerns in certain countries.

"It is interesting to note that consumers are
Declining consumer sentiment could hurt tour operators, who are finding it difficult to pass on higher costs
adapting their holiday plans in the light of Brexit and wider geopolitical uncertainty, but they still want to travel," said Research Analyst Bianca Schnieder. "Tour operators have reacted to this trend by adding more all-inclusive products, which offer price protection. Any negative shifts in UK consumer sentiment in the months ahead could translate into rising demand headwinds for tour operators, who would find it increasingly difficult to pass on higher costs. But so far, the 2017 season has been off to a good start."
The material contains the current opinions of the author, which are subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Forecasts and estimates have certain inherent limitations, and are not intended to be relied upon as advice or interpreted as a recommendation.

GrassrootsSM Research is a division of Allianz Global Investors that commissions investigative market research for asset-management professionals. Research data used to generate GrassrootsSM Research reports are received from reporters and Field Force investigators, who work as independent, third-party contractors, as well as external research panel providers—all of whom supply research that may be paid for by commissions generated by trades executed on behalf of clients. We believe these sources of information to be reliable and are providing the information in good faith, but in no way warrant the accuracy or completeness of the information. We have no obligation to update, modify or amend this document or to otherwise notify you in the event that any matter set forth in this document changes or subsequently becomes inaccurate. In addition, information may be available that is not reflected at this time. We accept no liability whatsoever for any direct or consequential loss or damage arising from your use of the information contained in this document. We and our affiliates, officers, employees or clients may effect or have effected transactions for our or their own accounts in the securities mentioned here or in any related investments. The information provided in this document is provided for informational purposes only and shall not be considered investment advice. Any reference to a particular company shall not be considered an offer to sell, the solicitation of an offer to buy or a recommendation to buy, sell, or hold any security issued by such company. No part of this material may be i) copied, photocopied, or duplicated in any form, by any means, or ii) redistributed without prior written consent.


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