Q and A: How would leaving the European Union impact tourism?
PUBLISHED: 08:00 04 June 2016 | UPDATED: 11:55 04 June 2016
The impact on tourism for holidaymakers and workers both at home and abroad is set to be a central issue in the European Union referendum. Tourism correspondent Lauren Cope reports.
Firstly, how important is tourism to the country – and our region in particular?
According to Visit Britain, the English tourism industry generates a massive £106bn a year, employing more than two million people and supporting thousands of businesses. Here in Norfolk and Suffolk, it is the lifeblood of our economy. Worth just under £5bn, it supports almost 100,000 jobs, accounting for 12pc of employment in Suffolk and 17pc in Norfolk.
How important is the EU to the industry?
Nationally, the EU is a significant contributor. Just over three quarters of trips, 45.7m, of trips by UK residents are to other EU destinations, with 23m, 67pc, of visitors to the UK coming from the union, figures from the Tourism Alliance show. But Chris Scargill, tourism and leisure partner at Larking Gowen chartered accountants, says it is a fraction of a lucrative industry here in East Anglia.
“In a nutshell, the value of wider Europe is worth about £40m to the economy of Norfolk,” he said. “Of the 1.3m overnight stays in Norfolk, 995,000 are from wider Europe, including countries not in the EU, which works out at 7pc.
“If we come out of the union there is a chance that some of that could be lost, but it is only £40m out of an industry which is worth £2.965bn.”
So how has being in the EU changed travel and tourism?
Open borders across much of mainland Europe, put in place under the Schengen Agreement, allow union citizens to travel, live and work freely – without a visa or passport – in many EU countries. The 26 member states include France, Germany, Greece, Italy and Spain – but not the United Kingdom, which retains its border control.
For holidaymakers, the policy, along with other directives and rules, has simplified travel around the union, making it easier and, without added paperwork, cheaper to nip abroad for a weekend break or beach holiday.
It also means that the huge army of tourism workers – 3.1m in the UK – are able to work abroad - within the union - with little hassle or cost. According to the Tourism Alliance, 1/3 of those workers are from the EU.
Other directives and laws by the EU have changed the way we travel. They include:
• Standards to keep beaches unpolluted
• Caps on mobile phone roaming charges
• Rights for passengers to be compensated for delayed or cancelled flights
• Reduced or free healthcare in all EU countries through the European Health Insurance Card (EHIC)
How would Brexit affect holidays in the EU?
In short, it is hard to say. It is generally agreed that, should Britain leave, there would be an initial period of uncertainty. Many say the cost of holidays and flights would rise and the value of the pound would fall, but much depends on what is organised after any decision.
If the UK joins the European Economic Area (EEA) – following in the footsteps of non-EU member Norway – there would be little change.
If not, though, many of the directives, standards and rules put in place by the EU would need to be renegotiated or costs could rise.
Would it spell the end of cheap budget airline flights?
The boom in the no-frills airline industry since 1995 is in large part due to removals of air service agreements within the EU, while the EU-negotiated Open Skies Agreement significantly cut the cost of transatlantic services.
If the UK left the union, it could negotiate access to the internal European aviation market through the European Common Aviation Area (ECAA), which covers non-member states including Norway and Iceland. To do so, the UK would have to accept EU aviation laws and work closely economically with the union – something it would seem reasonable for the UK to do.
However, the UK might not be guaranteed ECAA membership – and it is not cast in stone that we would apply for it. If not, it could see airline costs rise.
Also, it is thanks to an EU directive that passengers have compensation rights if a flight is delayed or cancelled.
And what about mobile phone roaming charge caps?
Pressure from the EU has meant the costs of using your phone in Europe have dropped – with EU roaming charges to be completely dropped in 2017. If we are no longer in the EU, it looks likely that prices to call home or get online abroad will rise.
What about the impact on our domestic tourism industry?
Along with changes on the way we holiday, leaving the EU would be felt on the tourism industry at home. While we don’t know absolutes, a report published by Bournemouth University on Wednesday put the cost of a Brexit at £4.1bn a year.
According to its findings, a third of travellers surveyed from Germany, Italy and Spain – and a quarter from France – would be less inclined to travel in the UK.
Again, many of the protections and benefits offered to EU travellers would not be automatic and would need to be renegotiated, to stop costs and administration rising.
But many say the initial short-term drop in the value of the Sterling against the Euro would make the UK a more purse-friendly destination.
In fact, Mr Scargill said there is an argument that coming out of the union could boost the industry in tourism-friendly regions such as the east.
“People are talking a lot about how flights from the UK may become more expensive, which may in turn encourage more staycations around the country,” he said.
“If people find that going abroad is too expensive they will consider holidaying at home, which is something we have seen in recent years already.”
What is the feeling from tourism businesses in Norfolk and Suffolk?
Unsurprisingly, divided. Mr Scargill said there was “mixed views”, with the amount of overseas workers in the industry an important factor.
Ian Russell, owner at Wroxham Barns, said his business had benefitted from employing European members of staff. “We have employed young people who have come to work in the UK for a while, but have no plans of settling here,” he said, “and it would be a shame was difficult to achieve in the future.”
He added that the uncertainty around the referendum had already affected “consumer confidence” and that the business may be “disadvantaged” if visiting the UK became more difficult.