Today’s luxury traveller is global.
They have multiple homes, businesses in various countries and an international family. In my job, as a luxury travel & lifestyle PR Director, I come across many high net worth (HNWI) & ultra high net worth’s (UHNWI) individuals and see first hand how the luxury traveller’s identity is far more connected to globalisation than just Europe wide.
Brexit has seen the pound take a killing, making it cheaper for international travellers to invest in the UK and more expensive for those earning in sterling to spend internationally. London is now becoming an attractive destination for international investment and due to the strength of the Euro & Dollar the British public is spending more money through ‘staycations’.
The real plus for the luxury traveller is that Brexit will encourage the UK towards an even more international outlook. Europe will still remain very important, but now so to the rest of the world.
There is so much speculation at the moment, but in truth we don’t know yet what will happen when Article 50 is triggered next year. Until the negotiations begin we will not know the real impact of Brexit has on airfares, taxes, trade agreements and more importantly visas. Many luxury travellers aren’t UK domiciled anyway, so have been battling the visa situation for many years. I would say ease of visas and flight routes are the most worrying aspect for the luxury traveller. The negotiator's efforts need to concentrate on working with other countries to ensure the current freedoms generated by the European Open Skies arrangement are maintained. Many luxury travellers fly privately around Europe so will be more concerned with the impact these cost implications have and the price of global oil has on travel than anything else.
In the luxury industry we look to the markets that are emerging; the new wealth that is travelling. This was once Russia, it’s now China and in five years will no doubt be South America. The US still has the highest capita of HNWI’s and 80 per cent of the general population doesn’t even travel outside the country. The Asia Pacific region now has the fastest accumulation of new HNWI’s in the world, growing at around 10% per year. The US, and Asia Pacific have approximately 5m HNWI’s each and Europe around 4.5m. So the question for the UK in particular is really: how will Britain create HNWI’s out of the Brexit economy?
We Brits are a pretty resilient race, if we can pick ourselves up, which we normally do, dust off the embarrassment and shock of Brexit and enable our entrepreneurs to create wealth, then Britain and our luxury travellers will ultimately benefit from Brexit. The talk now is on resolving the issue of additional runways at Gatwick & Heathrow. Climate change and the fact that I live right in a London flight path aside, this will be positive for investment and necessary to support international trade deals. It will allow the UK to maintain its position as one of the global powerhouses, and without it we will fall along the wayside.
Airline prices may go up due to the potential increase in new taxes if the government doesn’t negotiate beneficial trade agreements. We may have to start paying for entry visas, but this won’t affect the willingness or need for the luxury traveller to fly. I hope that Britain will negotiate a one-visa application for a specific amount of years so we can enter freely and with ease into the 26 countries in the Schengen zone, including France, Spain & Italy.
As a country, what we need to concentrate on now is the creation of wealth here, ensuring the UK is an attractive market for HNWI’s to do business in, with a strong focus on Brand Britain. Britain has taken a temporary reputational hit (as well as an internal divide) with Brexit, and although some admire our courage in leaving the EU, the majority are wondering if Britain is still going to be an influencer and trend setter. We need to turn around the negative profiling that Brexit has had on the UK and start to re-focus on the positive strengths that the UK is renowned for in order to continue to attract the luxury traveller.
There are a number of places around the world for the luxury traveller to benefit from taxation relief and investment opportunities. What Britain needs to do is to ensure that it remains one of the most desirable places in which to do business. That way the luxury traveller will use the UK as their base whilst continuing to be the global traveller they truly are.