A leading economist has urged the hospitality and tourism industry to be optimistic about the future – despite the uncertainty created by the Brexit vote in the EU referendum.
Andrew Sentance, senior economic adviser at PwC said the vote had created uncertainty but: “It’s important for businesses to recognise that the world goes on. Operationally everything continues. We haven’t left the EU yet…everything that flows from that is still in place.”
Speaking at the BHA Hospitality & Tourism summit 2016, Mr Sentance summarised the implications of the vote for the industry.
For tourism and hospitality business he said that there are two negative and one positive aspect of the referendum result.
Describing himself as a ‘glass half full’ economist he was looking hard at what the upside wold be for the industry.
On the plus side he said the “weaker pound makes the UK a cheaper place to come, and that could offset some of the negatives.”
He identified the negatives as the uncertainty and lack of confidence.
He said: “I spent nine years as chief economist for British Airways. When I was there we always found that periods of uncertainty always have a knock-on effect in terms of travel, particularly discretionary travel.
“There is also the chance the decision to leave the EU has affected the image of the UK in the eyes of some in the rest of Europe.
“The fundamentals of the UK economy are strong, but one of those [fundamentals] has been our trading relationship with Europe and that is going to be disrupted.”
He added that a lot has happened so far, particularly politically but many of the big decisions were still to come, and it was far from clear what the plan would be going forward.
“In some way the political uncertainty needs to be resolved and parliament needs to have found a before we trigger article 50 [to leave the EU].
“If there was a change of government some may feel the referendum debate was too dominated by internal politics of current government and therefore a second referendum might be justified.”
He said there were quite a lot of developments to play out before uncertainty is ended - a lot depended on how it pans out “before we can judge the scale of the current crisis”.
Mr Sentance added: “There is a spectrum of views across Europe…and I think we have just to wait and see developments. I think there is an understanding that the UK has to be part of the European economy, and trading relationships, but there is some concern about the political knock-on effects in other countries, and how it will play out.”
He added that France was a good example of the different views on how to approach Brexit in the way it had been much more aggressive than say Donald Tusk and Angela Merkel who were being more cautious about the speed of the UK’s planned exit.
As for the future he said like most forecasters he predicted uncertainty and negativity in the short term and growth was likely to slow but to what level was far harder to predict.