How our hol­i­days and travel plans are chang­ing

Belfast Telegraph - Business Telegraph - - Business Awards - By Damian Mur­phy, man­ag­ing di­rec­tor of Terra Travel

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

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