The UK’s travel and tourism industry is expected to be one sectors of the economy to benefit from the Brexit fallout, as the weak pound makes Britain an even more desirable and cost effective holiday destination for both domestic and international holidaymakers, says insolvency firm Begbies Traynor.
According to Begbies Traynor’s Red Flag Alert research for Q2 2016, which monitors the financial health of UK companies, the British tourism industry was already in a state of improving financial health in the three months leading up to the Brexit vote, with levels of financial distress falling across UK-focused travel and leisure businesses.
The research shows that during the past quarter, ‘Significant’ financial distress among UK Hotels and Accommodation fell 4 per cent (down to 3,382 struggling companies), decreased by 3 per cent among companies focused on Leisure and Cultural activities (5,464 companies) and fell by a further 4 per cent within the wider British Travel and Tourism sector (3,791 companies).
While much of the UK economy is expected to be hit by the Brexit vote due to increased uncertainty and rising concerns over job security, Begbies Traynor predicts that the British tourism industry will be one of only a handful of sectors to immediately benefit from the Referendum decision. According to recent reports, the ongoing sterling weakness against the Euro may add an extra £245 to the cost of a European getaway for the average British family so UK travel agents focused on booking holidays abroad, which may struggle to make ends meet.
Julie Palmer, partner at Begbies Traynor, said: “Despite the typically unpredictable British weather over the past three months, our data shows that levels of ‘Significant’ financial distress actually decreased across all key sectors of the UK tourism.”