Will the recent triggering of Article 50 affect your holiday this year?

Britain is ending its 44-year relationship with Europe by handing over the Article 50 letter to the European Council.

A recent survey carried out by SkyParkSecure.com revealed that 83% of voters would not be put off taking a holiday in Europe due to Brexit. Several comments suggest that the fear of a terrorist attack in prime European destination would be more of a deterrent than the possible effects that Brexit will bring.

But what effect is article 50 & Brexit going to have on your Holiday this year as a whole? It’s a good question so we decided to explore deeper into the technicalities & find out for ourselves.

Join the debate on whether Brexit will influence your holiday choice.

Unexpected surcharges appearing

Some tour companies are adding surcharges to their advertised prices, even where people have already booked and paid. At the moment, it is largely skiing holidays that are affected but we may see this ripple out to more types of holiday as the season progresses.

Some travel companies are blaming “uncertainty” for the surcharges. Since most travel companies actually buy currency ahead, it may well be that some failed to hedge the risk from the referendum properly and have found themselves caught out by currency movements. They may now be seeking to recover this money. The extra charges can be substantial with some families having to pay out £200-£300 more than expected.

With many travellers only finding out about the surcharge a month before they are due to travel, cancellation won’t help them as most of them are too near the holiday dates to be able to get a refund. It is worth checking your booking terms and conditions to see if there is nasty little clause saying that a surcharge can be added in the case of currency movements.

The Economy

The pound is still very weak against the Euro, US and Australian dollar. For example, when converted to the Australian dollar. £500 is worth AU$830 this year whereas it would have given you AU$1014 a year ago.

We spoke to Kallum Pickering a Senior UK Economist at Berenberg who said “A poor exchange rate is bound to have an effect on the UK travel market in 2017. Sterling is down on all major currencies which will force some families to stay in the UK this year. However this won’t stop the majority of people travelling, a 15% growth in the travel tourism market is expected this year with Europe looking like the UK’s most popular destination. Even though sterling is down against the euro it’s much better value than the Anglo-American currencies”.

Other currency experts are now saying that, depending on how the markets view the results of the French election, the pound could rise against the euro and that with the worst of the Brexit economic uncertainty over, the pound is unlikely to sink below 1.20 to the US dollar again. However it’s not a good idea to count on this because of the volatility of the currency markets.

Good value destinations

Obviously, the pound has not fallen equally against all currencies — it never does. Therefore some travel industry commentators are pointing to the best places to get value when you convert sterling. These include Japan, Malaysia and Mexico. This may surprise people who think of Japan, and particularly Tokyo, as an extremely expensive destination.

However, the Travel Money Holiday Report, produced by the Post Office, says that Tokyo is the cheapest of the eight far Eastern holiday destinations that it surveyed. Tokyo was 18% cheaper than Phuket and 43% cheaper than Beijing. As for the Mexican peso, it has actually fallen against the pound since 2016. Cancun anyone?

And while we can see inflation beginning to rise when we go to the shops in the UK, many local destinations abroad have seen no inflation since last year, and some have seen prices fall. So there is still value to be found.

Good Housekeeping publishes a Holiday Costs Barometer which takes the cost of vital necessities like a bottle of local beer, sun cream, a cup of coffee, wine, a meal and various other things, then compares costs across holiday destinations. The Algarve in Portugal came in as the cheapest holiday choice this year, with the basket costing £33.36. Bulgaria and Spain were also in the top three.

The increasing cost of hotels paid for in sterling, is good news for AirBnB which continues to see expansion because holidaymakers and travellers can find cheaper accommodation in informal lets.

Do they still like us?

Some travellers to European destinations are worried that Brits will be looked on unfavourably, because of the Brexit vote. This is also the same opinion of Brexit Expert Professor Thom Brooks the Head of Durham Law School who said “The good news for UK travellers is that Brexit shouldn’t affect them too much in 2017 beyond the cost. The uncertainty over trade and investment has fuelled a steep fall in the value of the pound making international travel more expensive. But it’s not all rosy. Travellers from the EU coming to the UK will lack the sense of security that they can work and live in the UK long term. This is because the UK government has put the status of EU nationals in Britain on the table for negotiations — as it has very little else at hand”.

However Many European countries are also having impassioned debates about the future of the European Union, and in the end, they are more interested in the fact that you have come to their country to spend money, and that you will probably continue to do so in the future.

Future changes — healthcare, borders and budget airlines

Of course as we move towards 2019, a great many more changes will affect the holiday industry. These may (or may not) include amendments to the scheme for reciprocal healthcare arrangements, the European Health Insurance Card (EHIC) which will mean travellers being more careful about taking out travel insurance.

At the moment we have a “borderless” Europe. It seems probable that UK holidaymakers will be able to go on holiday in Europe without a visa because Europe will be competing with other destinations for their custom. But they will probably need a passport to get into the country to begin with. In any case, the Schengen agreement which allows passport less travel on the continent, is under stress from other factors, so it’s not certain that Brexit will be the only pressure reducing travel flexibility.

The EU was very effective at getting different national governments to work together in the area of air travel. Among the results were the compensation scheme for delayed flights and the abolition of restrictive practices which led to the rise of the budget airlines.

Everything is currently up for negotiation and so far, we have no firm idea of what will happen. However the next two years will certainly be an interesting period for the travel industry and for holidaymakers trying to keep up with the changing holiday scene.

Still Confused ?

Dont worry about it, your not the only one! Here’s what it means in simpler terms…

The below information has been provided by ABTA to help UK travellers.

How will Brexit affect my holiday?

Until the UK officially leaves the EU, not sooner than two years’ time, there will be no changes to holiday arrangements. Travellers are as free to move between the UK and the EU as they were before the vote, European Health Insurance cards remain valid and regulations such as Air Passenger Rights remain in place.

I’m going to Europe this summer, is my passport still valid?

Yes. Until the UK officially leaves the EU, not sooner than two years’ time, there will be no changes to passports.

I’ve booked a holiday for next year — do I need to do anything?

No. Until the UK officially leaves the EU, not sooner than two years’ time, there will be no changes to holiday arrangements.

Do I need to get a new passport?

No. Until the UK officially leaves the EU, not sooner than two years’ time, there will be no change to passport arrangements.

Which queue will I go into at the airport — EU passports or all others?

The same queue as you did before the vote. Until the UK officially leaves the EU, not sooner than two years’ time, there will be no change to passport arrangements.

Do I need a visa to go to Spain?

No. Until the UK officially leaves the EU, not sooner than two years’ time, there will be no change to passport arrangements.

What about my European Health Insurance Card (EHIC)?

You can still use your EHIC card abroad. There will be no immediate changes to using your EHIC card abroad. Arrangements between the UK and other EU countries will have to be reached once the UK officially leaves the EU.

Can I still get compensation if my flight is delayed or cancelled?

Yes. There will be no immediate changes to claiming compensation if your flight is delayed or cancelled. The UK Government will need to implement a new law on compensation for flight delays and compensation after we leave the EU.

What about duty free? Can I still bring goods home?

You can still bring home unlimited goods until we officially leave the EU. The free movement of goods will be part of a negotiated settlement with the EU.

What about using my mobile phone abroad? Will roaming charges increase?

There will be no immediate changes to using your phone abroad, and there won’t be an immediate impact on charges. The UK Government will need to implement a new law on roaming charges after we leave the EU, otherwise the service providers will be free to set roaming charges.

Can I still take money out from cashpoints abroad?

Yes, you can continue to take out cash, as normal.

Will it be more expensive to go on holiday abroad?

Not necessarily. If you are travelling abroad and you have already paid for all of your travel arrangements, as part of a package holiday for example, then you will be protected to a large degree from a drop in the value of the pound. However, your spending power while abroad will be impacted in the event of a weaker pound, making it more expensive to buy things like meals and drinks.

What does this mean for the price of my holiday abroad?

If you are travelling abroad and you have already paid for all of your travel arrangements, as part of a package holiday for example, then you will be protected to a large degree from a drop in the value of the pound. People paying for overseas accommodation in other currencies (e.g. in euros or dollars) can expect to pay more in the event of a weaker pound.

Will the cost of flights increase?

A weaker pound may impact the cost of flights in the short term, in the longer term the UK Government will seek to negotiate full access to the EU’s common aviation market, which has delivered the open skies arrangements we have today.