How our holidays and travel plans are changing
Around two years ago the word Brexit didn’t exist, but now hardly a day goes past when most of us don’t say or see it as part of our everyday lives. As the implications are slowly starting to reveal themselves, we can now see the effect this period of European uncertainty is having on holidaymakers.
One big effect has been the impact on the currency market and now our pound is worth less when we visit European countries such as Spain, France and Italy. However, this has had the reverse effect for non-eu countries leading to some of them benefiting greatly from a rise in visitors from these shores.
Poland is a case in point with both Krakow and Gdansk reporting a huge increase in Northern Irish visitors. Ryanair has been quick to jump on this bandwagon by increasing flights to these Polish destinations from Belfast; indeed we regularly book a fournight break in either for as little as £159 per person.
Bulgaria is also seeing resurgence in visits from local travellers. In the winter we saw it as Northern Ireland’s number one ski destination, while in the summer months its fantastic beaches, water parks and cheap eateries have helped propel it up the popularity ratings.
So what has been the impact on the traditional holiday resorts/ destinations and what are they doing to fight back? Our number one destination in Europe is still Spain — however, the trend towards an ‘all inclusive’ holiday has increased. This has meant that local Spanish bars/restaurants have had to fight even harder for our euro.
Hospitality is not the only sector affected. There are other further reaching implications such as:
Higher mobile phone charges: EU regulations have helped contain roaming charges recently. This may well change.
Higher health care charges: the E111 will no longer be valid and there will be an increase in travel insurance prices. The end of flight delay compensation: the EU has been tough on its implementation of this directive with airlines paying up to £400 per person when found to be at fault with longer delays.
Higher airfares: this is already starting. The euro rate (higher fuel prices) is already pushing these up, but higher landing fees for non-eu airlines are likely to raise these further.
Visas: we already need one for Turkey, but will we be required to buy visas for entry to Spain, etc? The jury is still out on this one.
There is no doubt that there have been a number of political upsets over the last year. It is less clear if the new era being ushered in is the best of times or the worst of times. Opinions are subjective and may depend on the timeframe.
In the short-term, Tughans has been involved in a significant number of deals in the last 12 months. We recently were ranked as the number one Northern Ireland legal adviser in 2016 by Experian. We have been ranked number one for the past two years, having advised on 31% of all deals in Northern Ireland last year — 38% more than the next placed legal adviser. And our work represented 62% of total deal value in Northern Ireland for 2016.
This high transactional activity could be attributable to a number of short term factors, such as the drop in the exchange rate.
The weak pound has meant Northern Ireland export businesses can be more competitive. They are also more attractive for foreign buyers and investors, offering better value. People recognise that the main impact of Brexit and the election of Donald Trump as US President may only be really felt in the longer term. Brexit, after all, is at least a two-year process and investors may have the opportunity to successfully realise a return on their cash before the UK’S exit from the EU can have a detrimental effect.
In the longer term, we wait to see what the impact of Brexit, Trump and the upcoming Stormont election will have on the sustainability of deal volume and deal values. It is the epoch of belief, with Brexiteers seeing the UK’S exit from the EU as an opportunity to negotiate more favourable trade deals and unburden business from constraining EU regulations. Equally, it is the epoch of incredulity, as Remainers continue to argue that these trade deals could take years to negotiate, bringing uncertainty for the economy and businesses.
Deregulation for Northern Ireland businesses exporting to the EU is not a reality, having to continue to comply with at least some EU regulation.
Incredulity also stems from our 24/7 news feeds and omnipresent social media, as businesses have to sift through “alternative facts” and “fake news” to evaluate the impact of political decisions on their business strategy.
Will Trump reduce corporation tax in the US, making Northern Ireland investment less attractive, especially if Stormont fails to meet the conditions for setting our own rate of corporation tax?
Should we look east rather than across the Atlantic for investment and export opportunities? Recent Asian investment in Northern Ireland, with the acquisition of SDC Trailers by Chinese company CIMC and CGN’S acquisition of 14 wind farms across Northern Ireland and the Republic, demonstrates the eastern interest and potential for our businesses.
Northern Ireland businesses may be waiting in eager anticipation but some trepidation as the political events take their course.
What isn’t an option is stand- ing still. We need to identify the opportunities, tailor our strategies and businesses to maximise the possibilities but try to safeguard against the risks that might arise. Tughans will review the opportunities and challenges facing Northern Ireland business in the next few months to consider how best to weather the storm.
Let’s look to a spring of hope and forget about a winter of despair, with everything before us.
The main square in Krakow, Poland, which is enjoying a huge increase in visitors from Northern Ireland
NI wind farms have been bought by a Chinese firm