The U.K.’s Brexit referendum in June caused ripples but markets have snapped back after an initial slide, according to the GBTA BTI Outlook – Western Europe report.
The report by the GBTA Foundation, the education and research arm of the Global Business Travel Association, adds that while spending has been somewhat resilient, measures of near-term investment intensions plunged in the third quarter of this year, suggesting coming weakness.
Brexit’s potential for delaying short-term economic decisions and its long-term impact on trade, jobs, immigration and investment will create challenges for business travel across Europe in the years to come. The specific effects on business travel that GBTA foresees include:
- New waves of uncertainty may develop following the actual delivery of Article 50 as trade and immigration negotiations begin in earnest.
- The end of open skies for European air carriers may result in fewer flights and higher fares and reinstituting mobile roaming charges could expose travelers to rising voice and data communication costs.
- The debate over immigration could lead to extreme new U.K. visa requirements, which would likely be reciprocated across the EU. Coupled with rising security concerns in a new separated world, business travelers may face more difficulty and scrutiny moving throughout the EU.
- The free movement of people and money throughout the EU brought many advantages for business travel. Going forward airlines may have to renegotiate routes and gates with both the U.K. and the EU potentially resulting in fewer flights and higher fares, processing and acceptance of credit cards becomes more complicated and the end of the European Health Insurance Card for UK business travelers could muddle health coverage during trips.
- Establishing restrictions on the right for EU citizens to work in any member state will have profound longer-term impacts on business travel levels and patterns.
The report also noted that Western Europe’s business travel spending is projected to increase to US$210.7 billion in 2016 and top out at US$220.6 billion in 2017, 6.0% and 4.7% growth respectively –positive but slightly lower than predictions in GBTA’s previous forecast.