The impact of global social and economic instability, which includes the recent Brexit vote, on the tourism trade has triggered a shift in consumer preferences that is expected to continue in the near term, noted researchers at Euromonitor International in a report released today.
The market research company added that “geopolitical tensions, whether terrorism or political concerns, have impacted the traditional sun and sea destinations in locations such as the Mediterranean Sea, with safer destinations winning out.”
Caroline Bremner, head of travel research at Euromonitor, said the “substitution effect, where tour operators shift capacity away from troubled hotspots to more stable countries, is visible.”
“International arrivals declined in Egypt and Tunisia, suffering a negative growth of 25 percent and 5 percent respectively, as the travel industry and consumers shun trouble for the safer shores of Spain, Portugal and Croatia,” Bremner added.
Regarding the Brexit vote, the researchers said they expect it to “affect domestic tourism in the short to mid-term.” The firm said it is forecasting 2.3 million less visitors during to the U.K. over the next four years.
“Destination branding and consumer desire to travel would be hit hard by the uncertainty Brexit provides in the short to mid-term,” Bremner said.
“The [European Union] source markets, such as Ireland, Germany and Spain, along with the U.S., would experience the sharpest forecast change in volume,” the authors of the reported said. “However, a pound slump after Brexit would help entice visitors to the U.K.”
Other notable trends and insights include: Western Europe continuing to be the “most popular regional” destination; Asia Pacific has shown a 10 percent increase in tourism volume between 2010 and 2015; and Cuba is expected to see “a spike in visitor numbers in 2015 registering 3.5 million inbound tourists since the eased travel restrictions.”
Additionally, the researchers said Iceland has “emerged as a popular holiday destination with 21.4 percent growth between 2010 and 2015.”
In a separate report, Bremner said following the “leave vote” the U.K. has now “entered a period of uncertainty with many unknowns, notwithstanding the election of a new Prime Minister and the timeline for Brexit, once a decision is made on the triggering of Article 50 of the Lisbon Treaty that allows for member states to withdraw.”
The researcher said the firm’s macro model shows a 2 percent fall in the country’s GDP growth “over five years to 2020 stemming from a Brexit, with the biggest impact felt in 2017 and a return to the baseline forecast by 2023, meaning it will take several years for the U.K. economy to return to normal.”