Earlier this year a survey undertaken by Barclays business data indicated that nearly one fifth of British travellers, when questioned about their vacation plans, said that they were planning to holiday in their own country in 2016. They gave as their reasons, terrorist attacks abroad, saving money, and wanting to cut down on travel time.
Since then, Britain has voted to leave the European Union (EU), and while there are as yet no reliable statistics, the outlook for long haul travel does not look bright.
The sense is that the slide in the value of sterling against the US Dollar and the Euro by around 11 per cent consequent on the June 23 vote, and a subsequent fall in interest rates for UK savers will both likely accelerate the demand for ‘staycations’ and short breaks in the British countryside and towns.
In addition, albeit anecdotally, there are indications that this is already happening. According to the travel trade press, the UK has just had a bumper summer tourist season, not just from a surge in overseas visitors taking advantage of the weak pound, but as a result of significantly increased numbers of British holidaymakers staying within their own shores.
While this may be good news for the industry in the UK, it does not bode well for destinations such as the Eastern Caribbean which largely remain reliant on the UK market. It may also be problematic for all-inclusive properties in countries like the Dominican Republic and Cuba that pitch their product and sales to the lower, more price sensitive end of the UK long haul market.
Unfortunately, it is going to be at least four months before the British Government decides exactly how it intends leaving the EU, before the markets definitively respond, and more importantly from the tourism industry’s perspective, how consumer sentiment reacts.
For the industry in the Caribbean this implies that apart from those selling to the middle to the top end of the UK market – which tends to be resilient other than in a major financial crisis of the kind seen in 2007/8 – uncertainty and delay is the most likely market response they will see. That is to say, an important segment of British consumers are unlikely to give consideration to their 2017 spring and summer vacation plans, or more generally to consider long haul travel, until early next year.
What this suggests, if taken with market analyst’s forecasts that sterling will settle at about US$1.25 to the £1, is that industry participation in events like this year’s World Travel Market (WTM), which takes place in London from November 7-9, will be unusually important.
For those that are unaware, WTM is the big international trade fair at which buyers and sellers meet to strike deals for the year ahead, but which also enables the industry from around the world to consider trends and test the temperature of demand for their product.
Although it is now probably too late to change the way the region physically presents itself at this year’s WTM, it is worth observing that over the last few years the size and quality of much of the Caribbean village has diminished, and some Caribbean nations have ceased to participate. It has also seemed that the design of some of the Caribbean booths has become dated and in stark contrast to the modernity, light and openness of those of competitor exhibitors from Latin America and elsewhere.
That said, there are of course exceptions. Jamaica, Cuba and the Dominican Republic all now have a significant modern presence at the fair and have present large number of hoteliers, tour operators and attraction owners.
Despite the fact that in recent years there has been a widespread industry feeling that such events have become less relevant in mature markets like the UK, and when an ever-increasing number of bookings now take place on-line, this is almost certainly a moment when a more traditional approach is required in the UK market.
The significant uncertainties as a result of Brexit suggest that this year, and perhaps the next two as well, require Caribbean tourist boards, ministers, hoteliers and service providers to be very visible at WTM in London.