My personal view is that the Brexiteers had no idea what the outcome to the UK economy would be following the referendum.
I look the plunging Sterling rates – 1.23 at a recent low against the Euro – and the uncertainty the suddenly weaker pound causes our business, and see a malaise, which will probably continue into the New Year.
Speaking as a SME dealing with and sending (mostly) young British people abroad on holiday, our costs in foreign currencies, in particular the dollar, are obviously inflated by the weak pound. It’s something for the time being we must absorb, but sooner or later the fear is that it will filter through to the customer in the form of higher prices. How far that process will go is unknown at present, but it seems likely that the outcome will be dependent on the Brexit settlements reached, how smooth the transition is, and what effects it has on Sterling.
Meantime we at Acacia Africa will be doing everything in our power to keep costs to our customers down – we are aware more than anyone just how important the bottom line is to young people in general but especially those who are considering travel to Africa. The UK is South Africa’s largest overseas source market for tourism and the devalued pound has and will continue to affect interest and bookings now and in the near future. That’s despite the weak South African Rand, which was certainly an advantage pre-referendum for us and other safari operators selling the southern Africa regions (including Namibia, Swaziland and Lesotho).
For the moment, booking patterns, including the length of stay and amount of ‘spend’ and even the decision to travel at all will be influenced by the value of Sterling. Uncertainty makes people nervous and less willing to commit – perhaps more in the long haul travel sector than short haul.
Then again, as research continues to show, our core market of youth travellers, millennials in particular, tend to value ‘experience’ over ‘things’ – this is a time of life when they are (generally) free to roam the world. There may (therefore) still be a silver lining in the coming months and over the peak booking period. A recent survey by Flexjobs reported that 70 per cent of millennials identified the desire to travel as a primary reason to work, second only to paying for basic necessities (88 per cent). That’s a telling statistic and will undoubtedly give hope to tour operators focused on this sector in the current and uneasy climate.