The Brexit result stunned most of the European business community, and has had some immediate consequences.
While sterling has weakened, inbound visitor arrivals to the UK should increase and while London’s performance has been positive up to April, year-to-date May RevPAR was down 3.0% to £99.88 (US$146.63), as a result of a 2.7% decline in occupancy.
Regional UK saw RevPAR increase by 2.2% to £46.87 (US$68.80). Britons may be less inclined to travel overseas however initial indicators have not shown any decline in the pace of overseas bookings. However, the outbound tourists to the Republic of Ireland (in particular from Northern Ireland to the Republic of Ireland which is divided by a 300 mile land border) may be threatened by weaker sterling and potential border restrictions.
No other country will be affected more that the Republic of Ireland as a result of Brexit, which accounts for more than 50% of all exports to the UK. Over 43% of inbound visitor arrivals to the Republic emanate from the UK and it is estimated that the Republic’s GDP could be impacted by up to 2% when, and if the UK separates from the UK.
On the positive side, as the only English speaking and Euro denominated country in the EU, Ireland stands to gain greater FDI as a beachhead into the EU that may see City of London financial services relocate to Dublin, attracted by a more benign 12.5% corporation tax.