Despite the stark warnings of many prominent economists, analysts and financial experts, on 23 June the people of the United Kingdom voted to leave the EU. The nation which boasts the mother of parliaments exercised its democratic right through a referendum to go against the perceived wisdom and strike out into the unknown.
Since then the main UK political parties have undergone their own firestorm with the Labour leader, Jeremy Corbyn, facing a leadership challenge and more significantly the UK Prime Minister David Cameron, who led the campaign for the UK to Remain in the EU, stepping down. The nation breathed a collective sigh of relief when Theresa May took the helm. Ms May also supported remaining in the EU, but has said that the will of the British voters must be respected.
Brexit has the potential to have significant ramifications beyond just the UK. The global economy and global business travel market, however, are hoping a change in leadership in the UK will promulgate a successful transition to a world where the UK is independent from the EU. According to the most recent GBTA Foundation BTI™ Outlook – Annual Global Report & Forecast, sponsored by Visa, the financial upheaval and pending changes to trade and immigration rules will raise many concerns in corporate management and travel offices – causing some postponement, and even outright cancellation, of business trips. It may also trigger travel budget constriction as management seeks to hedge the uncertainty.
Since the Brexit vote, the global economy and the global business traveler market have faced renewed uncertainty. The pound dropped to its lowest point in over three decades, and many UK travel-related businesses warned that the negative effects could hurt their bottom line and travelers alike. While there has been a slight improvement since the Brexit vote, the dust continues to settle, yet uncertainty remains the order of the day in terms of both the global economy and the global business travel market.
While the global BTI report was compiled before the Brexit vote, the added uncertainty the vote brings will make its mark felt on business travel. If the UK does enter a mild recession, domestic and outbound business travel will suffer. On the other hand, a much weaker pound will make leisure and business travel to the UK a real bargain, while business travel between the UK and Europe will likely slow as issues surrounding visa, entry requirements and passports will need to be renegotiated.
The UK has a proud history of liberal democracy, innovation and enterprise. The global economy is hoping that Theresa May and the UK can draw on these qualities as they determine the best course of action for leaving the EU.