On June 23rd, the citizens of the UK made a historic decision, voting to leave the EU.
As American expats in London, we were on the front line of the controversial referendum. There is a voting location about ten feet from our front door, which was flooded all day with eager voters. Also, Boris Johnson, the former mayor of London and the leader of the ‘Leave’ campaign, lives in our neighborhood. I cruise by his house on my morning run and when I turned the corner onto Colebrooke Row the day after the result was announced, there were TV crews set up on the small street and two armed police guarding his front door.
Clearly, some people were very angry.
Needless to say, the ‘Leave’ vote has generated a lot of questions and concerns about exactly how things will change in the UK in many aspects of life. Regardless of whether you think Brexit is good or bad for the UK, there are short and long-term ramifications for travelers in both the UK and the EU at large. Many of these consequences have yet to play out, but they will be debated and negotiated while the details of the exit are settled.
In the meantime, here are some of the biggest potential changes travelers will face as they touch down for their summer holidays this year and in years to come.
Currency Exchange Rates
The Monday after the Brexit vote, the British stock market lost billions in value. The vote destabilized what has historically been one of the region’s most stable economies and the pound sterling, that stodgy currency of the UK, took a beating. Today, nearly two weeks after the results, the pound has hit a 30-year low, and is currently trading at £1.29 to $1.
The euro has also fallen since the vote, as world economies speculate on the future of the EU without the UK as a member. Today, the exchange rate is €1.10 to $1, one of the lowest exchange rates since the euro was introduced nearly fifteen years ago.
For travelers from outside the Eurozone and UK, it is a great time to visit. Your currency will go further than ever. Personally, as we have access to both pounds and dollars, we’ve begun using our dollars-based credit cards more frequently thanks to the exchange rate. Just with this slight change in behavior, we’re saving about 13% on every single transaction.
However, within the UK, the major holiday operators like Thompson and Monarch are fearful of a drop in Brits traveling abroad (the EU is the destination of choice for 76% of UK residents). The depreciation of the pound means that the pound does not go nearly as far as it once did. For many thousands of people, that might be the difference between going abroad on holiday or staying in the country. For the holiday operators, the reduction in revenue could pose significant consequences to their financial stability.
One of the greatest joys of traveling in Europe is access to amazing low-cost airlines. We’ve discussed our feelings about budget airlines at length on this site, and I can’t overstate how much of an impact cheap airfares have had on our ability to travel as much as we do. The main reason ticket prices are so low is because the EU liberalized the skies 20 years ago with a single aviation space, resulting a ton of start-up airlines and increased competition.
It’s possible, in post-Brexit Europe, that some of the air restrictions between the UK and EU will increase, resulting in fewer flights per day, and thus, higher prices. The budget airlines are doing their best to minimize any impact to their business, by pressuring the EU to maintain the single aviation zone.
However, the night before the vote, we got an ominous email from Ryanair, announcing a fantastic one-day fare sale, with the warning that if the UK voted to leave the EU, these would be the cheapest airfares the airline would publish for a long time.
Bottom line, we won’t be surprised if we start to see flight prices more variable than usual, even though it will be some time before this particular conflict is resolved.
The Border and Immigration
One massive question on the table is how Brexit will effect immigration. The UK is not part of the Schengen Zone, which allows for freedom of movement around most of the EU, including 22 member states. So for both UK and EU citizens, who already have to show a passport when they travel from the UK to Europe (or vice versa), there will be no change.
Instead, the major change could be the freedom to work in the UK. Currently, any holder of an EU-nation passport can freely move to the UK and begin working without the need to apply for a work visa. The UK is a very attractive place for those who speak English as a second language, especially given the financial instability of some nations like Spain, Italy, and Greece, and the prevalence of foreign workers has boomed over the past few years.
The travel, tourism, and hospitality industries has taken advantage of the ease of hiring EU nationals, employing large numbers of EU workers. If those workers were forced to leave the UK and return home to apply for UK work visas, the UK could experience major staffing shortages. For visitors, that would mean fewer staff at tourist information centers, restaurants, hotels, museums and local attractions. In an international city like London, there simply wouldn’t be enough local staff to replace those positions quickly or efficiently, potentially causing major frustrations for visitors.
The status of the EU legislation that provides protection to UK vacationers while traveling aboard is also uncertain.
Today, all EU residents receive compensation for delayed or canceled flights, receive financial protection for packaged holidays if the holiday company goes out of business, have limited mobile phone charges (the EU is eliminating roaming charges altogether in 2017), and have access to free or reduced treatments in hospitals throughout the EU.
With the Brexit, all of these rules and regulations will have to be renegotiated within the UK parliament, which will take time. As of now, there are a slew of conflicting views about the likelihood of all of the legislation being re-implemented in the UK.
With the referendum, the future of travel around the UK and EU is uncertain, and many years of government negotiations are needed to determine the terms of the dissolution of the partnership. There could be far reaching implications for the travel industry, but only time will tell how it all shakes out.