How much will Brexit affect Aussie travel habits? Perhaps not much.
The world’s largest travel company, TUI, derives about one third of its turnover from Britain, yet it doesn’t expect to see any big change in travel habits after Britain’s decision to leave the European Union, the so-called Brexit.
TUI, a multinational travel and tourism operation headquartered in Hannover, Germany, should know. It’s the largest leisure, travel and tourism company on Earth, owning travel agencies, hotels, six European airlines, cruise ships and retail stores.
TUI chief financial officer Horst Baier told Germany’s Boersen Zeitung, the Frankfurt-based daily financial newspaper, that any prolonged weakness of the pound flowing from Britain’s momentous Brexit decision might make holidays abroad more expensive for Britons, but he doubted that would dampen the love of travel among British holidaymakers.
While Baier did not make mention of Australia, a market TUI is not involved in, it follows that if Brexit fails to change British travel habits, its effect on Australian travelling habits would be correspondingly less.
Baier conceded that Brexit would have some impact on TUI’s profits but he mentioned that the firm had hedged against currency volatility, as well as the oil price, for the 2016/17 financial year.
“There are no real risks relevant to results because of the [Brexit] decision for the current financial year,” he told the paper. “However, because of the translation effect from pounds to euros, we will feel an effect in the profit-and-loss account.”
Growth prospects for global tourism were very positive, Baier said, giving TUI confidence it could minimise the impact.
In May, Reuters quoted TUI saying that bookings for the European summer were 1% ahead of last year, with demand for holidays strong.
Written by Peter Needham