BREXIT
At the Spring Tourism Conference in Edinburgh 2016, the delegates were asked to raise their hands for and against Brexit. In a room of about 150 people, a bare handful supported leaving the EU. So the Referendum result has come as a shock to us in tourism, and very much at odds, it seems, with the opinion of tourism leaders.
While there is a Scottish political dimension to the result, we have to remember that this was a UK vote, and that many of the things that happen next are reserved to Westminster, all be it that Scotland has been specifically invited to be part of the process.
In a fast moving political landscape, it us very early days for us to assess what Brexit will mean. Hopefully the early appointment of Theresa May as prime Minister will allow a period of stability before Article 50 is invoked. So, trying to nail some jelly to the wall …….
Money, Taxation and the Economy
- Scottish Tourism may well receive a short-term boost, primarily due to sharp currency movements making Europe much pricier. An increase in ‘Staycations’ would undeniably be positive for the self-catering sector, representing an opportunity.
- It remains to be seen how Brexit will affect the numbers of flights to/from Europe.
- VAT rates – Euro regulations prohibit setting a O% rate, so there may be fresh opportunities to revisit VAT Rates for tourism.
- Cut in corporation tax already flagged up.
- There will be a period of economic uncertainty with firms putting investments on hold – difficult to know exactly how this will affect us specifically as yet.
- There will be an effect on Business Tourism – difficult to assess just now.
- Anyone accessing or securing European Funding for anything will have to join the UK or Scottish money queues. Apart from major infrastructure projects like road and harbour improvements, the whole Rural Leader project will cease – this is money for Rural Development and many tourism projects are supported by this scheme. There is quite a chunk of money coming from Europe accessed by VisitScotland, HIE and SE covering various things, like the recent Digital Tourism courses. This will be a major battleground as tourism will have to line up with the Farmers, Universities and everyone else who received European funding. Governments in London and Edinburgh should be asked to guarantee that these funds will be replaced from EU contributions saved. For devolved sectors like tourism and farming, this becomes complicated with two queues to keep an eye on.
- Tourism is linked into other sectors, like Transport, Culture, the Wider Economy and so on. Difficulties in other sectors may have an impact.
Laws
- At some stage, the UK will have decide how many EU Directives will have to be adopted and rewritten in UK and Scots law, and Travel and Tourism does have a few of these. There is an Opportunity to remove red tape/do things differently. We need to be alert to the process here, and ready to step in at the right place at the right time with our views. It is essential that the tourism industry is part of this process and is consulted. If we retain access to the single market, there may be less opportunity for change.
Politics, People, Borders and Immigration
- Tourism employs many EU Nationals, but despite the warm welcoming words from Scottish Government, Borders and Immigration are reserved matters to Westminster.
- Borders, Passports, Visas and Immigration may all look different, and goodness knows what will happen at the Ireland/Northern Ireland border.
- The ASSC was a founder member of the European Holiday Homes Association, round the table with big players in holiday letting, pooling expertise and resources to make our voice heard at European level. It is unclear where we will now stand in the Association.
- The question of Scottish Independence has not disappeared, a bit louder than it was. It can be argued that Scotland is in a more difficult place than we were in 2014 with a much poorer economy, fewer answers on currency and a hard border at Gretna more certain. However, hearts may be won over if the case is made to remain/join Europe. Federalisation is also being explored as a model.
- The Scots are seen as ‘Good Europeans’ which may put us in a better light with our continental visitors, but the UK may have to work harder to attract overseas visitors purely in reputation terms.
- At the moment the Scottish Government is getting sympathy in Europe, but no deals as Brexit negotiations are currently with Westminster – It was a UK vote.
Brexit presents potential opportunities, but also potential threats. It is critical that the industry works together collaboratively, and with key decision makers, to ensure that any threats are turned into opportunities, and the sector is supported through uncertain times.