Forecasting Brexit's Impact on Cruising
Photo courtesy of Cunard Line
As Britain has voted to leave the European Union, cruise travel implications will begin to emerge, not just for British brands like Cunard Line and P&O Cruises but larger companies like Carnival Cooperation, Norwegian Cruise Line Holdings Limited and Royal Caribbean Cruises Limited.
Greenpeace’s Energydesk reports that Brexit developments occurred on Cunard’s Queen Elizabeth, where the Midlands Industrial Council arranged to gather members of parliament, ministers and businessmen for political discussions onboard on occasions in 2013, 2014 and 2015. The site claims that Grassroots Out leader Nigel Farage called for a hand-raising poll of attendees in 2014 to see how many were for Brexit, resulting in 75 percent affirmatives.
Even before the Brexit decision was finalized, the initiative was causing cruise industry stock prices to weaken among investor concern. Performance numbers have also been affected by reduced European cruise demand in general, according to Wells Fargo Securities.
Corporately, Carnival, Norwegian and Royal Caribbean have all suffered. The thinking was that the UK remaining in the EU would improve the stocks. Now that is less likely to happen as Wells Fargo analyst Tim Conder was quoted as saying, “Economically, a Brexit vote could in the short-term also negatively impact eurozone growth and, to a lesser degree, global growth.”
READ MORE: Brexit and the UK's Hotel Industry
The impact on the industry might also come in the form of restricted booze cruises according to Mirror Online. Lower taxes and overall beer and wine prices combined with a strong pound and reduced transit fares have encouraged English Channel crossings to pick up liquor in France and bring it back to the UK. But Brexit could result in customs limitations. Even the potential reintroduction of cross-Channel duty-free retail is unlikely to make up for any new restrictions.
Victoria Bacon of the Association of British Travel Agents was quoted as saying, “At the moment you can cross to continental Europe and buy as much booze as you want to bring home. In the event that we leave the EU, this will have to be renegotiated … The overall assessment, from a travel perspective, is that the potential downside of leaving the EU cannot be matched by the potential upside.”
Fred. Olsen Cruise Lines does not have a comment regarding Brexit specifically but stresses that the company follows exchange rates, saying, "The only point that we make to our guests, as we did 4 to 5 years ago, is that we have Sterling prices on board, so when the exchange rate is against us, it does not have the same impact as taking a holiday in Spain, for example, or those cruise lines that price in Dollars on board."
What policy changes will result from Brexit that affect cruise travel more broadly are still to be seen, but they could have an impact on frequent international sailings based in Southampton, among voyages to and from other UK homeports and destinations, as well as relationships with European source markets.
When asked for comment, Cruise Lines International Association (CLIA) provided the following statement: "As with other sectors, the cruise industry relies on stable business frameworks and regulatory certainty to operate efficiently. This is why CLIA hopes that Europe's stability and business environment will not be unduly affected. CLIA will continue to work with authorities to promote stability and ensure that cruising continues to thrive and carries on making a vital contribution to Europe's economic growth."
More by Jason Leppert
Get Travel Deals and Travel News
Recent Travel Opinions
Airlines & Airports
Cruise Line & Cruise Ship