Brexit: Greek tourism faces 5th worst impact in Europe if UK demand falters
The United Kingdom is a key source market for many international tourist destinations, hospitality-on.com notes in the following analysis:
Across the European continent, and especially within the Eurozone, many hotel markets rely heavily on the contribution of British arrivals. In light of their respective exposure to the Kingdom's clientele, which countries could be affected the most by the outcome of the referendum?
British visitors constitute one of the largest shares of tourists in many European countries. On Mediterranean beaches, at the summits of the Alps and in the pubs of Europe’s major cities, it can be difficult to ignore Her Majesty’s subjects. The United Kingdom is the second largest European source market for hoteliers: British citizens spent close to 215 million overnight stays in hotels (and similar accommodations) in the European Union in 2014, including 110 million outside their own territory.
Following Brexit, Europe’s markets be affected in different ways by the potential change in behavior of British clientele - especially considering the variation of the Pound sterling in the foreign exchange market. This mostly depends on their current exposure to the British market: the higher the number of overnights attributed to visitors from the United Kingdom in each European country, the more likely it is for hotels to receive negative impact. In the upscale segment, where foreign clientele is the most significant, change must be analyzed not only in light of the British quota, but also in regard to overnights ascribed to non-residents for each destination.
There is no denying that the consequences of Brexit could be quite different from one market to another. Some countries should not suffer much from the British clientele’s possible backward surge, whereas future prospects in other destinations – along the coastlines in particular – will be facing major uncertainty in the months and years to come.
The breakdown of overnights across Europe shows that British tourists are especially fond of Mediterranean destinations. Hoteliers operating along the continent’s southern coastline, who had grown accustomed to receiving visitors from the United Kingdom, have good reasons to be worried after the result of the referendum announced this morning. Here is the main issue: the devaluation of the Pound sterling, now more plausible than ever before, will certainly have an impact on the inclination of the British when it comes to travelling abroad. This could especially encourage clientele to favor domestic destinations.
Most exposed markets
The most exposed markets include destinations focused on leisure tourism, an industry that is occasionally shaken by external political and economic circumstances. A decrease in purchasing power in Britain could have direct consequences on choices of destinations, and affect performances in popular cities and regions for international tourism. The islands of Cyprus and Malta appear to be the most sensitive markets when it comes to exposure to British tourist arrivals, as they account for respectively 31.2% and 30.7% of total overnight stays in hotels. Despite the significant distance between the coastlines of Britain and Cyprus, tourism in the latter should be more affected by the referendum than in any other European country.
Three other southern European countries follow, with Portugal and Spain at the front with respectively 16.2% and 16.1% of overnight stays consisting of British visitors. Also among the first destinations affected by this decision is Greece, with a share of 11.9% of overnights in hotels and similar accommodations in 2014. In light of the most exposed markets, hoteliers operating in these destinations can start feeling the pressure, especially in coastal regions and properties aimed at the leisure clientele. In any case, in markets where British residents represent more than 10% of total overnight stays - not to mention the fact that they usually spend more than the average – the impact of the United Kingdom withdrawing from the EU will not be neutral.
Some of the largest European destinations could also feel the shift, should the demand from British visitors falter. In countries such as France, where British residents made up 5.8% of total overnights in 2014, and also the Netherlands (8%) and Croatia (6%), professionals are legitimate in their concern. This is also true for England’s Irish neighbor, where 8% of global overnights are Her Majesty’s subjects. In these countries, international tourism’s most popular destinations could be noticeably affected, especially those featuring a wide variety of upscale properties (Amsterdam, Paris, French Riviera, etc.). Traditional strongholds for business travel such as Belgium and Luxembourg remain an enigma: its is difficult to foretell in which direction Brexit will drag hotel performances before the United Kingdom negotiates the conditions of its withdrawal with European institutions.
The impact of Brexit on tourist arrivals should be more limited in the northern and eastern regions of Europe because the share of British visitors is less significant in Baltic countries as well as in Central and Eastern Europe. In 2014, the British accounted for only 1.1% of total overnights in Slovakia and Romania, 1.8% in Estonia, and 1.9% in Sweden. However, this is not true for absolutely every destination in those regions: it is fair to say that major tourist cities such as Prague, Kraków and Budapest should also feel the impact of a drop in British tourists.
Other destinations find themselves in an intermediate position. British visitors account for only 1.7% of all overnights in Germany – however with respect foreign nights this share is much more significant as it represents 7.2% of these nights. Once again, those destinations exposed to international tourism should comparatively suffer the most from the consequences of Brexit. Logically, the affect will not be the same for cities such as Berlin and Hamburg, on the one hand, and destinations benefitting from domestic arrivals and secondary urban markets on the other. The months to come should reveal the evolution of the behavior of British clientele.
Read more here.
RELATED TOPICS: Greece, Greek tourism news, Tourism in Greece, Greek islands, Hotels in Greece, Travel to Greece, Greek destinations , Greek travel market, Greek tourism statistics, Greek tourism report
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