How does Brexit impact the tourism sector?

3 min reading time

Published on 28/02/23 - Updated on 26/04/23

Brexit

Effective since the beginning of 2020, the Brexit has had various consequences on many sectors of activity, starting with tourism. British tourists as well as tourists wishing to visit the United Kingdom are all equally impacted, with, among other things, the strengthening of customs controls. Three years after its introduction, what conclusions can be drawn?

The UK has always been an attractive European destination with no less than 40.9 million visitors in 2019. However, the following year was marked by two major events, the introduction of Brexit at the end of January and the arrival of Covid a few weeks later.

These events resulted in a significant drop in tourist numbers to 11.1 million. But like the rest of the world, the following years have seen the UK tourism sector recover somewhat with a slowing down of the health crisis coupled with an easing of related restrictions.

However, data from trade association UKHospitality, in association with research agency CGA, has revealed that despite sales in 2022 exceeding pre-Covid levels, 32% of hospitality businesses are likely to fail next year. While Brexit has its part to play in this, the impact of current inflation, labour shortages and Covid-19 debt must also be taken into account.

These figures show the difficult position in which the sector finds itself. Public demand is clearly there, with revenues exceeding pre-crisis levels, but there is no way for venues to capitalise on this demand as they drown in successive price rises. If we don't act, we can see how difficult the coming year could be, with a third of businesses at risk of failure. Venues are simply unable to pass on prices to the consumer at the same rate as they see their own costs rising. 

Kate Nicholls, Chief Executive, UKHospitality

And the situation could get worse next year with the introduction of inbound travel authorisation. The UK's European Travel Information and Authorisation System (ETIAS) is expected to be introduced soon, modelled on the one already in place in the US. This document will concern all foreign travellers, even those from visa-exempt countries, i.e. European travellers who until now have only needed their passport.

This travel authorisation takes the form of an online form to be completed several days before departure. This formality will also be accompanied by a fee, the amount of which is not yet known. For information, the travel authorisation required to enter the United States, the ESTA, costs 21 dollars.

The ETIAS was supposed to come into force at the end of 2023, but the European Union has once again postponed its implementation. Indeed, the Commission's website on migration and home affairs has changed the implementation date of ETIAS to 2024. Furthermore, this is in line with the UK government's aim to have fully digitised border crossing by 2025.

This will not only make people happy, it will also make it more difficult to travel to the UK. Gone are the days when you would have to travel on a whim, as a travel authorisation application is processed within 48 to 72 hours. In addition, some people may be reluctant to pay to stay in the country for a few days.

The ETIAS should thus have an even greater impact on a British tourism ecosystem that has been weakened for nearly three years now. The professionals of the sector have not yet expressed themselves on this subject, but this will certainly not help their business, as they are already facing an unprecedented increase in the cost of energy and raw materials. It remains to be seen whether tourists will remain loyal to the destination or whether they will turn to other territories that are easier to access.

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