Short-term Brexit delay ‘worst scenario for trade’

A short delay to Brexit would be a “disaster” for this summer’s peak travel period, according to senior industry figures.

The EU agreed an extension to either April 12 or May 22 last week, but it appeared increasingly likely the deadline would be pushed back closer to June – the height of the late-booking period.

Martin Alcock, owner and director at The Travel Trade Consultancy, said: “Even a no deal would not be that bad for bookings because at least people would have certainty.”

Speaking at a Travelzoo event  last week, he added: “A two-month delay is a disaster. A 10-month delay probably just kicks the can down the road, but it would save the summer season. A short delay is the worst scenario.”

MoreSpecial Report: ‘Short-haul is a challenge but overall outlook positive

His views were echoed by Richard Singer, chief executive of Speaking at a Travel Weekly Business Breakfast, he said: “If there’s a short extension to May, June or July going into the summer period it will have an elongated knock-on effect. It could get worse. People want clarity.”

However, both said there could be a “Brexit bounce” after a decision.

Singer said: “You could expect a mini boom [after clarity on Brexit]. For most companies it’s about being agile and having the ability to react. If only 10 people are looking for holidays today and tomorrow there is a thousand, then you want to have enough marketing and the right activity planned.”

Alcock said: “The economic data is not terrible. It’s uncertainty, politics, confusion and chaos that’s causing people to pause. I firmly believe there are lots of people out there ready to spend money.

“If you had told people in January that by March 20 we would be no further ahead they would have booked then, but everyone is saying ‘I’m just going to wait’.”

Panellists at the Travel Weekly event reported a drop in demand for European holidays this summer amid Brexit uncertainty and The Travel Network Group reported that members’ short-haul revenue during peaks was down 13.6% and passenger numbers down 11% year on year.

GfK data shows sales down for the last two weeks (see bar chart).

But industry observers said the economic outlook was largely positive, with employment at an all-time high and household spending up.

Emma Jolly, head of partnerships at Riviera Travel, said the operator’s sales were flat year on year, but it was still expecting a bounce “at some point”. She said: “The market is educating people to wait for deals. We are not a discounted product, so that presents a big challenge for us. Everyone is delaying their decisions.”

Season-to-date sales still up but dwindling

Industry analyst GfK reported summer 2019 bookings down 10% year on year for the week to Saturday (March 23), after a 7% decline the previous week. However, the comparison week in 2018 for the former was “very strong” at 18% up on 2017.

Season-to-date bookings for summer are now just 1% up on a year ago, with the average selling price not quite 2% up year on year.

Winter 2018-19 bookings remain 4% up for the season to Saturday and were up 2% in the week to March 23, with the season now almost sold. Bookings for April departures are 13% up on last year.

GfK senior client insight director David Hope said: “Brexit is all over the news and people are holding back awaiting an outcome. If it drags on, there will be people who decide to stay home.”

But he added: “Brits will travel if the price is right.”

MoreSpecial Report: ‘Short-haul is a challenge but overall outlook positive


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