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Industry news

Uncertain times cast a shadow on the travel industry

Economic and political uncertainty have traditionally impacted travel behaviours. What we are seeing today is unsettling and likely to take its toll, with the likes of Brexit in the UK and possible impeachment proceedings against the President of the United States.

In the past we’ve seen situations like these cause travellers to bunker down and put trips on hold. Would-be tourists are watching the headlines and taking note of political discussions. According to VisitBritain, the nation’s tourism board, Britain has seen a “slowdown from Europe” as well as a reduction in both international arrivals and visitor spending in the first six months of this year. Though a modest 1-2 percent lower than last year, the decline represents a reversal of positive growth made in 2017 and 2018.

The USA has also seen a cutback in international arrivals and its market share of global travel — with a forecast loss of $180 billion in customer spending by 2022, according to the US Travel Association (USTA). The ‘Trump Factor’ has been cautiously sited by the USTA as having an effect on the downturn. In addition to the political unpredictability, it’s not a big stretch to imagine how the country’s reported attitudes towards ‘outsiders’ and foreigners could be interpreted negatively by potential visitors.

In the UK, a post-Brexit labour market is also expected to impede UK tourism’s ability to recruit. The Office of National Statistics says that European nationals make up 10 percent of the UK tourism sector workforce and in some areas the scale of dependence is much higher. The likely reversal of the ‘freedom of movement’ will cause recruitment headaches for the tourism industry.

Precarious political climates within a country can also reduce its outbound travel. This has a flow on effect for other countries that benefit from their tourism industry’s contribution to the economy. With markets being easily rattled and businesses avoiding taking risks, concerns over job security and other financial factors can cause a more cautious approach to discretionary spending.

Having said this, it’s not all doom and gloom for the travel industry. While some countries are experiencing a slump, others are enjoying record visitor growth. Smart countries are not undervaluing the tourism dollar, but these times are a cautionary reminder that the tourism industry can’t extract itself from the world of politics.