Those who weren’t on Thursday’s all-night political rollercoaster woke up to the cold, startling reality that the UK made an earth-shattering decision to leave the EU.
The Scottish Tourism Alliance had maintained a neutral position in the run-up to the referendum, although our worries centred on the impact Brexit might have on our key markets– which include our EU neighbours – and the threat to Scotland’s competitiveness as a tourism destination.
Like every sector, we’re looking at what Brexit means for us in the short term. Holidays to Scotland may be cheaper due to the fall in the pound, which could prove to be a boost for the tourism and leisure industry. We could also see the return of the “staycation” as more people look to holiday at home.
In the longer term, we simply don’t know how the UK’s move to leave the EU will affect us. It is probably safe to say that any short-term gain as a result of a weaker currency will be significantly offset by the impact of changes in relation to our access to European markets.
The renegotiation of European air access agreements and any possible changes in the UK’s status as a European and international air hub could lead to higher air-fares and fewer flights within Europe. Changes to the free movement of both the business and leisure traveller could also be a barrier and will certainly directly affect the sector’s ability to employ and retain overseas staff, both seasonal and permanent.
Uncertainty about sterling’s exchange rate could create problems for inbound tour operators resulting in delays in securing contracts with hotels, carriers and ground agents. Changes to tariffs on European produce, in particular food and drink, on top of an already high VAT, could increase prices, reducing our competitiveness further.
Increased prices are likely to have a knock-on effect on UK residents’ disposable income, potentially affecting all areas of the hospitality, travel and leisure sectors. Our industry also faces the loss of European funding support for tourism development activities, particularly in rural areas.
Bringing about supportive change at policy level in relation to Air Passenger Duty and VAT remains a priority for us. This is a key opportunity for the Scottish Government to reduce APD and minimise the risk of airlines disconnecting from Scotland. This is a “now” ask. A reduction in APD is Scotland’s biggest immediate opportunity to demonstrate its international outlook, and its very different view from the wider UK.
Tourism is not a large corporate that can be moved to a “friendlier” commercial environment. It is Scotland’s most important industry. That we know for certain. We also know that tourism is everybody’s business, whatever your business. It is up to each and every one of us to support the creation of policies which send out a very clear message to Europe and the rest of the world that Scotland is still very much open for business.
- Marc Crothall is Chief Executive of the Scottish Tourism Alliance