Last updated: 07:05 PM ET, Fri June 24 2016

Tour Operators Take a Reckoning on Brexit

Tour Operator | David Cogswell | June 24, 2016

Tour Operators Take a Reckoning on Brexit

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The world is reeling as Britain votes to leave the European Union. As much as rank-and-file Britons may wish to turn the clock back to simpler, more comfortable times, there is no way to reverse history. The way to dissolution must be forged by moving forward. But how?

Now that the public has spoken and moved to tear apart the bonds that have tied Britain to the European Union, the actual work of untangling the many layers of connections will begin. For tour operators who have anything to do with travel to Britain, the changes will become part of their daily business.

"The people of Britain have made their decision and the onus is on us to respect their wishes," said Richard Krieger, president of IsramWorld. "Our office in London is monitoring the situation closely. We're confident that Brexit or otherwise, the United Kingdom would continue to be our closest ally in the years to come."

READ MORE: Brexit and the UK's Hotel Industry 

The first lesson is the perennial and prevailing fact of the tourism industry: the unthinkable happens. Our inability to think about something will not prevent it from happening. Now we move forward to deal with the next phase of the highly complex project of unraveling Britain from the EU, dragging our collective failure of imagination behind us.

"I don’t think I myself nor most Americans are well positioned (or educated) to speak about the long or even short term effects of Britain leaving the EU will have on either," said Dan Austin, president of Austin Adventures. "As this is an unprecedented event with the eyes of the world watching it unfold, only time will tell.

"As to the impact to our business, frankly I don’t see it. We don’t currently offer adventures to Britain and we have few travelers from the UK.  I have to look at it like a stone cast into a pond. There is a big slash and dramatic ripples, but in time the ripples fade and the pond returns to calm (until the next stone).  There may be a short term impact as future travelers watch the US Stock Market or work to understand the impact on the Euro or the dollar."

For business there will be advantages and disadvantages and business leaders must move to position themselves on the advantageous side of the new flows of money, markets and people as the rules change.

For the travel business some advantages and opportunities are already revealing themselves. The British pound will no doubt drop further against the dollar, making it a great time to visit Britain for Americans.

“"The euro slipped to $1.05 today,” said John Stachnik, president and co-owner of Mayflower Tours. “Tourism will benefit greatly on a short term basis. What the long range future holds is much cloudier.”

“In the short term, it’s great news for travelers thinking about traveling to the UK,” said James Phillips, president of TravelBound and a native of Britain. “The exchange rate has moved to be very much in favor of the American visitor.”

“It will take some time to understand how the UK’s decision to exit the EU will affect trade or the economy in the UK,” said Paula Twidale, executive vice president of Collette.

“However tourism is an economic driver. The dollar will become stronger against the pound and it is a perfect time to travel to the UK to take advantage of those savings in restaurants, shops, museums and throughout the tour. Travel to Europe in general remains strong and we remain confident that our guests will continue to support the UK and Europe as planned prior to this referendum. We don’t anticipate any changes to our travel plans or product offerings.”

The plunging of the value of the British pound creates opportunities for Britain to attract tourists, and for tour operators to make the most of the attraction.

Greg Geronemus, co-CEO of smarTours, is looking at the possibility of inaugurating his company's first-ever tours to Britain.  "SmarTours has sent nearly 200,000 travelers across the globe since 1996, yet we have never had a trip to England," said Geronemus. "It's perhaps the most glaring omission in our portfolio of trips. It's one of the great destinations in the world, yet we have always struggled to find a way to offer England in a way that's sensibly priced and in keeping with the smarTours commitment of offering affordability and value. However, Brexit has changed the equation completely.

"England will now be dramatically more affordable and we are taking a hard look at offering a new tour to the United Kingdom. A new tour to England will not only be great for our customers, but it will also help benefit England's economy."

Earthshattering as the Brexit vote is, there is no guarantee that it is the last domino to fall. Now that Britain has voted to exit the Union, Scotland may revisit its referendum on leaving the UK, marking the end of the UK as we know it. For tour operators, the opportunity presented by that will be a rush to visit the UK before it is itself dismantled.

“Longer term this could be the start of the breakup of the United Kingdom,” said Phillips, “which means that travelers looking for the full UK experience might consider moving their plans forward. It’s not out of the question that there might be another Scottish referendum and that they vote to leave the UK based on wanting to remain within Europe.”

Ireland, north and south, will also be part of the shifting equation.

“There are big implications for Northern Ireland and the Republic of Ireland which today share a fully open border,” said Phillips. “So, my advice would be to travel now to benefit from the great exchange rate, and don’t rule out major changes to the constitution of the UK — and definitely prioritize that UK trip — we can no longer take its existence for granted!”

Labor policies will have to be redrawn, which will affect any industry that uses labor, with repercussions that will ripple out to other areas. Tourism is labor intensive and will no doubt be affected.

“There is also the question of what happens to the intra-European migrant population, many of whom are in service jobs,” said Phillips. “Will this mean that we see an increase in wages and therefore costs as supply in the job sector shrinks? In the longer term there could be inflation, especially if (Britain leaves) the common market and duties are imposed on imports, including some of the cost inputs into the hospitality sector."

Ultimately, even those who led the movement for Britain to exit, do not now clearly see the way forward. They may be like the hysterical dog chasing a car who suddenly realizes he has caught it. What now?

“Clearly everyone has been caught off guard,” said Phillips. “Even the ‘Leavers’ are now saying that there’s no rush to exit — which is ironic. In the medium term there is the question of how UK border controls might be adjusted and the extent to which this changes the experience when traveling between the UK and Europe – but this will take some time to address and there probably won’t be major changes.”

 Jack E. Richards, president and CEO of Pleasant Holidays, said he views the change as primarily a political event rather than an economic one, but the foreseeable economic implications are not unfavorable.

"Any significant changes are likely to occur over the next two years," said Richards. "U.S. travel to the UK may increase in the short term as the stronger U.S. dollar will make travel more affordable. Travel within Europe, including the UK, is likely to become more complex due to stricter border controls to limit European immigration. Airline fares for UK carriers and flights within Europe may increase due to additional costs and tighter regulations within the UK. Overall, we see a positive travel trend for the short-term with many unanswered questions for the long-term."

The The World Travel & Tourism Council (WTTC), hoping to answer the call for voices of authority and sanity, issued a statement of reassurance to the travel industry.

READ MORE: How Will Tourism to the UK Fare After Brexit?

“The World Travel & Tourism Council (WTTC) emphasizes that travel to, from and within the EU and UK will not be affected in the short term. The process set out by the Lisbon Treaty allows for a two year period of negotiation once the UK formally states its intention to leave the EU, and this period could even be extended by agreement of all the parties. During this period the legislation around travel and tourism will remain unchanged.”

David Scowsill, president and CEO of the WTTC, said, “We are entering a period of market uncertainty which will undoubtedly put pressure on travel and tourism businesses, however we know that our sector is resilient and we expect business and leisure travel to hold up in the face of these challenges.”

Meanwhile, tour operators -- no strangers to crisis and havoc -- return to the day-to-day business of operating tours, and addressing the concerns of their clients.

"The vote in the UK yesterday to exit the European Union will undoubtedly result in calls from prospective travelers," said Pamela Lasser, director of media relations for Abercrombie & Kent. "We are reassuring our guests that travel to, from and within the EU and UK has not been affected and that all programs are operating normally.  There are no anticipated changes regarding visas or related travel requirements for US travellers at this time, however we will advise if any changes should occur. 

"We expect an orderly transition over the next two years as specified in the Lisbon Treaty, although currency markets are likely to be volatile in the coming days and weeks. Europe offers good value with attractive savings on offer for summer and fall travel to Europe."

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