Could tourists be the key to a brighter Brexit?

With all the doom and gloom surrounding Brexit, it’s worth pointing out a potential bright patch: the rise in tourism and the growth of domestic holidays, or ‘staycations’. Both are spurred on in part by the drop in the value of sterling, which has been significantly weakened by the Brexit vote.

The effect of a falling pound is twofold: not only does it mean that Brits are more likely to stay at home for their holidays, but by making Britain more affordable it also attracts more overseas visitors to the UK.

Britain was already popular with holidaymakers. Aside from London, which ranks as one of the most visited cities in the world, hotspots such as Oxford, Bath and Edinburgh receive millions of tourists every year. According to UK Tourism, Britain is the 8th largest destination by volume of visitors in the world.

Leaving the EU could act as a stimulant for British tourism in other ways, too. For example, it would allow the government to review Air Passenger Duty, a tax which is currently enforced on both legs of domestic flights. Its retraction would make domestic flights more economically viable, increasing the value for money of British holidays and regional interconnectivity. 

Brexit could also dampen demand for overseas travel. Depending on the agreement reached, it could also mean raised taxes and possibly even visas for British travellers going to Europe. This could end up stimulating demand for domestic holidays by making trips to Europe harder and costlier. 

However, although tourism brings in huge amounts of revenue, it also changes a community’s character. Unless it is carefully managed, an excessive number of tourists can disrupt life for the locals and undermine the reasons why people wanted to visit in the first place. If unsustainable, tourism can end up fuelling booms and busts, leaving once-popular destinations hollowed out and empty.

Venice is an extreme example of what can happen when tourism gets out of hand. The city has been rocked by a series of protests against what some locals perceived to be the malign influence of tourism, especially over housing. As more and more properties are converted into hotels or used solely for Airbnb rental, Venice’s housing stock is dwindling - pushing up prices and forcing locals out of their own city. 

You don’t have to be a Venetian to see parallels with some of our own cities in the UK. A lack of affordable housing is a growing problem, and not just for those in the south-east of England. Even a small rise in tourism, handled improperly, could exacerbate matters. Councils therefore need to be prepared for future tourism. 

Many local authorities have long been aware of the benefits to sprucing up attractions and sites, which include raising jobs, income and civic pride. However, when aiming to increase tourism, it’s worth carrying out a risk assessment to evaluate its impact. How will increased visitors impact local transport, for example? A robust risk assessment will identify potential bottlenecks before they arise, ensuring that tourism does not obstruct the delivery of core services.

Although tourism and the revenue it brings is hard to turn down, there are always hidden risks and dangers attached to the incoming visitors. But when managed correctly, it can boost much more than the coffers. Sustainable, well-developed tourism can enhance a region’s best aspects, empowering it to grow. With any luck, it could be a bright spot for local authorities. 


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Readers should not act upon (or refrain from acting upon) information in this article and related document links without first taking further specialist or professional advice.


Risk Management Partners Limited is authorised and regulated by the Financial Conduct Authority. Registered office: The Walbrook Building, 25 Walbrook, London EC4N 8AW.
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Risk Management Partners Limited is authorised and regulated
by the Financial Conduct Authority.
Registered office: The Walbrook Building 25 Walbrook, London EC4N 8AW.
Registered in England and Wales. Company no. 2989025.