Industry uncertainty as hung parliament confirmed [Updated]

The UK travel industry awoke to new political uncertainty following Thursday’s general election. A hung parliament was confirmed on Friday morning.

While the Conservative party is forecast to be the largest party in Westminster, it was set to fall short of a majority.

The Tories were projected to win 318 seats, short of the 326 required for an overall majority, with Labour on 265.

The outcome could cast doubt over plans for a third runway at Heathrow and the Scottish National Party’s plan to halve Air Passenger Duty in Scotland.

Theresa May’s future as prime minister was immediately called into question.

The pound fell sharply against the dollar before making a partial recovery amid suggestions that Brexit negotiations are likely to be delayed.

Analyst Neil Wilson at ETX Capital told the BBC: “May’s mandate to push through a clean, hard Brexit has evaporated.”

The head of the Confederation of British Industry, Carolyn Fairbairn, said businesses would be stunned by the result.

“We need to be signalling strongly that we are pro-enterprise and open to business,” she said.

Former Abta head of public affairs Luke Pollard was voted in as Labour MP for Plymouth Sutton and Devonport with a large majority.

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.”

Abta public affairs director Alan Wardle said: “Following yesterday’s vote, the exact picture is still unclear with no party having a majority.

“Theresa May took a gamble by calling the election and things haven’t played out how she wanted them to. While it looks like she will remain prime minister for now, how the Brexit negotiations play out is unknown.

“Whoever comes into power, we will have contacted them via our #valuetourism campaign to highlight the importance of tourism to jobs and the economy.

“During the campaign, Abta contacted over 2,000 electoral candidates from across all the parties to ensure that they understand the issues we would like to see prioritised in the new parliament.

“While it may be several days before we know the new government, it is vital that whoever comes into power does not delay in tackling the important issues facing our industry.

“We will be engaging with the newly elected MPs and cabinet ministers, once confirmed, to encourage support for the industry’s priorities, including our priorities for the Brexit negotiations, and to ensure prompt action on fake holiday sickness claims.”

Jon Ostler, UK chief executive of financial comparison site, said: “The uncertainty of the hung parliament has given sterling yet another hit, with a 2% drop overnight. For many; the worst result for confidence in currency.

“Signs of certainty and stability as the nature of the next government becomes apparent will help currency.

“According to finder research, Brexit has already added 11.9% to the price of a holiday and if you’re booking travel or buying currency, hold onto your money and think about going all-inclusive.

“The prospects of a hard Brexit may be less, but the only certainty is uncertainty.”

Simon Phillips, retail director at the travel money specialist No1 Currency, said: “For now the pound’s prospects look much like Theresa May’s – clouded with doubt.

“Nearly a year on from the Brexit earthquake there’s no end in sight to sterling’s see-sawing instability.

“As long as the debate rages about whether Britain will end up with a hard or a soft Brexit, the volatility will continue.

“The pound fell 2% overnight as the markets reacted in shock to the exit poll – and this is unlikely to be the last big swing as the horsetrading begins in earnest, both in Westminster and Brussels.

“Against this backdrop, predicting the future course of the pound is a mug’s game, so anyone planning a foreign trip should watch exchange rates closely over coming days for any sign of improvement.

“The only certain thing is that more uncertainty lies ahead. So it may be worth buying some holiday money now to mitigate your risk – even if you don’t plan to travel for a few weeks.

“Above all, travellers need to be savvy when buying foreign currency.”

Gary Lewis, chief executive of The Travel Network Group attributed the failure of pollsters to call recent elections in the UK and USA to the speed of social media in shifting opinions. He said: “The results are also proving we have greater democracy in the UK, which has to be a good thing.

“Personally, I think the country needs strong and decisive leadership and a clear majority going into the Brexit negotiations, and a hung parliament isn’t the best model to achieve this, but having an extreme left party from the 80’s has been avoided.”

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