Domestic tourism is being hit by a weaker economy following the referendum result and the political instability surrounding Brexit, according to financial consultancy PwC.
Speaking at a TravelGBI and Tourism Society debate about the impact of Brexit, Philip Shepherd – a partner in PwC’s retail, consumer and leisure practice – said he was concerned about the rate of British economic growth compared to other European economies since the Brexit vote.
He told delegates that, while the exchange rate has been favourable for inbound tourism to the UK, it has reduced business confidence and affected inflation.
“This clearly means that for many businesses, the costs will have gone up,” he told the debate.
“What is perhaps most concerning is that we are now the laggard of Europe. Overall Eurozone growth will be about 2.2% this year and probably just over 2% next year.
“The major economies we compete against – France Germany, Spain – are growing faster than us. So although there’s been no dramatic decline since Brexit, it has clearly put us in a weaker position.”
He said that inflation is outstripping wage growth, and productivity is stagnating in the UK, adding: “This is leading to a softening of consumer confidence and consumer spend. And this, along with political uncertainty, is clearly having an impact on domestic tourism.”
Shepherd also highlighted how the hospitality sector has also become overly reliant on immigrant labour from the eurozone.
“In 2004, on average between 4% and 5% of the workforce in the hospitality trade was European immigrant labour. Now, it’s between 14% and 17%,” he said.
“The industry has become more reliant than any other sector on what might have been seen as an easy source of labour, and has not put in place the training and marketing necessary to attract a domestic workforce.”
Shepherd is pictured at the debate (right), with Tom Jenkins, chief executive of Etoa, the European tourism association.
• For more from the Brexit – what next for tourism? event, look out for the Special Report in the next issue of TravelGBI.