Brexit: opportunities and pitfalls for the United Kingdom

Good news for hoteliers?

The latest monthly performances of London's hotel industry suggest good prospects for the coming months. With the decline in the value of the pound sterling, prices are becoming increasingly attractive to European tourists, with an exchange rate that is evolving in their favor. As a result, they continue to flow across the Channel from the Continent and gain purchasing power at the destination.

Patricia Yates, Director strategy and communication at VisitBritain, already foresaw good growth in tourism for the country after the announcement of Brexit in 2016:

Tourism is one of the sectors that could truly benefit from changes caused by Brexit. This is a great opportunity.

Despite the announcement of Brexit, all metrics were positive for the British hotel industry in 2018: OR (+0.5 pt), ADR (+1.2%) and RevPAR (+2.1%), according to data collected by MKG Consulting. The RevPAR increased particularly in the major urban agglomerations, whether in Liverpool (+6.7%), Glasgow (+5.6%), Birmingham (+3.2%) and London (+2.6%).

Although the separation from the EU, which was supposed to become official last March 29, was postponed, March 2019 saw an increase in tourists arrive at the capital's hotels. London's occupancy rate rose +2.46 percentage points from 84.57% in March 2018 to 86.81% in March 2019.

In the same dynamic, the few days that followed the postponement of the exit from the EU gave a veritable boost to hotel activity in the capital: on Monday, April 1, OR climbed +15.13 pts, the ADR climbed +86.55%, so that the RevPAR skyrocketed +131.38%. The next day, this surge continued, with occupancy rising a further +19.93 pts, an ADR up +53.43% and RevPAR climbing +96.59% to reach  €211.24 ex-VAT, while the previous day the RevPAR was €167.52 ex-VAT.

Another correlation between the political context and tourist arrivals that may be...