That’s the message contained in the GBTA BTI Outlook – Western Europe report which indicates that while the Eurozone’s population and institutions may have been surprised by the outcome of the June Brexit referendum, the economy has barely missed a beat as markets have snapped back after an initial slide.
The report also notes that consumers are consuming and businesses are hiring, investing and travelling for now.
And while spending has been somewhat resilient, measures of near-term investment intentions 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 report stated.
The specific effects on business travel that GBTA foresees include:
- Uncertainty — New waves of uncertainty may develop following the actual delivery of Article 50 as trade and immigration negotiations begin in earnest.
- Travel Pricing — The end of open skies for European air carriers may result in fewer flights and higher fares and reinstituting mobile roaming charges could expose road warriors to rising voice and data communication costs.
- Travel Friction — The debate over immigration could lead to extreme new UK 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.
- Access — 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 UK 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.
- Location Decisions — 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.
Catherine McGavock, GBTA’s regional vice-president – EMEA, observed: “While trips and spending have been bounded by slower European and global economic growth, Brexit’s influence has been negligible thus far. Businesses and business travellers continue to show their resilience and ability to adapt as Europe has faced an array of challenges recently, but business travel remains strong.”
The GBTA BTI Outlook – Western Europe report looks at the five largest business travel markets in Europe: Germany, the United Kingdom, France, Italy and Spain that together make up 70% of Western Europe’s business travel market, and serve as a strong indicator for the European business travel market more broadly.
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 – very positive numbers, but slightly lower than predictions in GBTA’s previous forecast.