Brexit Update – Good or bad for the industry?

So here we are 20 months on from the vote and in 14 months we won’t be part of the EU.  I’m no expert in politics or negotiation but it does seem to me that we ought to be a little further on with the process by now.  Feels rather like we are moving house tomorrow and haven’t done any packing!  In economic terms we’ve bumped along at a similar level with mixed signals so it’s hard to say what the effect has been.

One thing that is incontrovertible whatever your opinions is that the pound has fallen substantially against other currencies.  As it happens I’ve just returned from Spain and whatever rates are quoted on the news, I’ve just looked and credit card transactions and cashpoint withdrawals were at something like 1.09 euros/pound.  In my mind and I suspect it’s the same for most people this means that I am treating prices in euros as pounds as the difference is too small to bother working out and it’s a painful experience I can tell you.

So the Europeans are coming?
It’s tempting to jump to the obvious conclusion here that we are about to see a rush of business from Europeans whose money will go a lot further in England.  If I were a tabloid journalist I might choose to quote some statistics at this point- looking at the period since 1st September visits to our main website from Germany are up 12%, from Spain up 121% and from France up a massive 160%.  Perhaps I’d write a headline along the lines of ‘Dorset bracing itself for Euro tourist invasion’ however just to put these numbers into perspective the number of German visitors has soared to 276 and we had 28,000 visits from the UK in the same period.  For our business foreign tourism is a red herring, the opportunity is definitely with the ‘staycation’ visitors.

Sentiment and the shoulder months are key
Tourism is very very sensitive to people’s state of mind.  I’ve written before about people effectively looking for a reason not to rent your holiday property- they have found 50 to choose from and they need to whittle that down to a sensible shortlist.  The same process is currently going on at an earlier stage in households across Britain- shall we go abroad or stay in next year? It’s easy to think about the family spending a lot of money on 2 weeks in the summer holidays but this is not where good years are made or lost.  We always sell all the peak weeks so it’s Spring and Autumn that really count and these are the pre and post children customers.  They may or may not be affluent but my feeling is that they are definitely price sensitive.  We’ve all been there- you pay £150 for a hotel room then won’t drink a beer from the minibar because it’s £5 for a small bottle.  It’s not that you can’t afford the fiver and it’s not that you don’t want the beer but once you get it into your mind that something is unreasonably priced you start to believe everything is and that’s what is happening to thousands of people like me in Europe at the moment.

Are we seeing an effect?
As I’ve written many times I always look at the data which often shows a different picture to what I think is happening.  This time my feeling that we were having a very good autumn has proved to be borne out by the figures- September was up on last year which was up on the previous year following the vote, October too showed an increase and most promising of all advance bookings for 2018 are up on this time last year.  Everything is pointing in the right direction so despite my severe misgivings about the result it would seem that at the moment we are reaping the benefits of the country’s choice.

Bumper Brexit years to come or will the economy go into reverse and bookings decline in the long term.  The jury is out and we will be revisiting the subject regularly.

Contact Simon on:
t. 01202 707 357
a. 2 Banks Road, Sandbanks, Poole, Dorset BH13 7QD

Simon Tolson owns Rumsey Holiday Homes in Sandbanks and a portfolio of holiday cottage agencies in Cornwall.

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