There is a silver lining in every situation, and for Brexit, this upside appears to be a bounce inbound tourism. According to The Guardian, the UK became a lot more attractive for visitors, as overseas residents spent £24.5 ($31.51) billion on visits to the UK in 2017, up 9 percent on 2016. Evidently, tourists saw a weak pound as an enticing reason to visit the island nation. However, this is likely to flatten, and the UK could be facing a Brexit which could ultimately cost billions for the tourism industry.
Across the pond in the US, inbound tourism is also slowing down, but for a more positive reason. According to Kiwi, a strong dollar could be deterring tourists. “Growth is expected to decelerate in the case of domestic travel while international inbound travel is projected to remain soft. This is consistent with an expectation of stable-yet-moderating economic growth both in the US and globally,” said David Huether, US Travel’s senior vice president for research, reports Kiwi.
In the face of the UK’s Brexit struggles, this is a better reality. However, regardless of the US’ healthy economy and dollar, many businesses rely on tourism to survive and this stagnation will have a serious impact on livelihood.
To better understand the situation and what steps businesses can take to prepare themselves, we spoke with Jonathan Breeze, the CEO of AardvarkCompare.com, a travel Insurance Comparison site, who said “As the dollar strengthens, international travelers find the US a more expensive place to visit. As a result, international tourism to the US may well drop. US businesses that were reliant on international travelers may wish to look a little closer to home. A strong US dollar is typically a sign of a robust US economy – exactly what we have today.”
He adds: “We have the lowest unemployment levels in history, low-interest rates, and increasing wage levels. Now is the time to double down on marketing within the US for the US domestic market. California, Florida and Vegas have done this for years. Time for other parts of the country to step up, and encourage us to visit!”
If there is a silver lining for every bad situation, then there must be a negative in every positive. For the US, a strong economy means less inbound tourism, which means businesses will have to become more creative with local customers.
Disclosure: This article includes a client of an Espacio portfolio company