The UK travel industry awoke to a new dawn of political uncertainty following yesterday’s general election.
A hung parliament was confirmed early this morning due to Conservative losses and Labour gains.
While the Conservative party is forecast to be the largest party in Westminster, it was looking to fall short of a majority with the loss of at least 11 MPs against Labour gaining as many as 28.
Meanwhile, the Scottish National Party lost 21 seats and the Liberal Democrats gained five.
The Tories were projected to get 316 seats, Labour 265 and the SNP 34.
Such an outcome is likely to cast doubt over plans for a third runway at Heathrow, a project backed by the Tories, and the SNP’s plan to eventually abolish Air Passenger Duty in Scotland – both of which could now face serious opposition.
Question marks immediately emerged over Theresa May’s future as Tory leader amid a call from Labour leader Jeremy Corbyn for her to resign.
He said it was time for May to go and “make way” for a government that would be “truly representative of the people of this country”.
Corbyn said he was “very proud” of the results so far, which he said were a “vote for hope for the future” adding that people were “turning their backs on austerity”.
The pound fell sharply against the dollar before making a partial recovery as traders reacted to the results with suggestions that Brexit negotiations, which were to due start next week, were likely to be delayed.
Neil Wilson at ETX Capital told the BBC that a “softer version of Brexit” was now more likely.
“Mrs May’s mandate to push through her clean, hard Brexit has evaporated. Voters didn’t want to hand her the blank cheque for Brexit.
“It may leave negotiations in limbo but would also tend to suggest that the downside for sterling is limited,” he said.
Kathleen Brooks, at City Index, told the broadcaster that the pound has remained relatively stable, suggesting that the prospect of a hung Parliament and even a second election was not triggering market panic.
“Perhaps the market is looking at this result as a vote for a softer Brexit, which could boost the pound in the long run,” she said.
“The British people may have voted to leave the EU last year, but it seems like they want a trade deal and don’t want an exit to hurt the prospects for the economy.
“Ironically, the uncertainty formed by this election result is not causing market panic, even though who governs the UK now hangs in the balance.”
Former Abta head of public affairs Luke Pollard was voted in as Labour MP for Plymouth Sutton and Devonport with a large majority.
The head of the Confederation of British Industry, Carolyn Fairbairn, said businesses will be stunned by the general election result, and the country will need to indicate it is open to business.
“We need to be signalling strongly that we are pro-enterprise and open to business,” she said.
BHA represents 46,000 hospitality and tourism business across the UK.
Ufi Ibrahim, chief executive of the British Hospitality Association warned of greater political uncertainty.
She said: “This is the last thing the hospitality and tourism industry needs as we already face a ‘perfect storm’ of issues but the BHA will work with whatever government emerges to see a return to stability and certainty so that we can get on with creating jobs and growth in the economy.”