Brexit’s Potential Impacts on Caribbean Tourism
Although the world is still grappling with understanding how Britain voting to exit the European Union will take shape and to what level the region may be affected, as tourism destination developers and product specialists, here’s our take on potential impacts on Caribbean Tourism.
It is difficult to predict how the exit will play out and if Article 50 of the Lisbon treaty, allowing two (2) years of negotiations, will change the current course of the withdrawal, however what is evident is the immediate impact the vote has caused worldwide.
CARIBBEAN TOURISM ARRIVALS & PRODUCTS
Since the vote the British Pound has dropped to a 31-year low making it worth 12% less. This may have some interesting implications, it may limit the purchasing power of the U.K. middle class, dampening their spending habits on discretionary spending, including vacations.
Should this occur, a result we may see mid-market products suffer, some with weakened purchasing power of British tourists, particularly hotels, resorts, and restaurants with visitors opting for similar but lower priced options. This is not a prediction, but a precautionary note to take stock of for some who may be considering a diversification of their tourism products.
There is also some concern that with some Caribbean destinations recently seeing double-digit increases in U.K. tourists a weaken Pound may result in much slower growth. Additionally, destination entry and departure taxes further limit middle-class purchasing power and mid-market products.
There is an upside however, big-ticket purchases will not be limited and luxury destinations traditionally favored from U.K. citizens including BVI, Barbados, Antigua, and St. Kitts will likely not see a severe downfall, as middle-upper to high-income tourists will not be dramatically impacted. As such, those who did not traditionally realize feeder markets from the UK or Europe will also fair seemingly well with perhaps an increase from their US feeder markets. With the above, there are still unknowns when you factor in the direct impact on Caribbean tourism.