Brexit: 'Not only Britain will suffer'
Britain might not be the only one to suffer damage from a Brexit, the global economy is bracing for impact, too.
All eyes are on the European Union as the UK approaches its controversial Brexit vote. But ramifications of the referendum will be more far-reaching than any one continent. Given that London is the biggest gateway for international travel to Europe, a UK separation could create a storm of regulatory headaches, from immigration, to consumer protections, to airlines. Here's what passport holders need to know ahead of the vote on Thursday.
Flying through Heathrow may feel more like flying through JFK-not in a good way.
International travellers passing through New York's JFK will all commiserate over the brutal American welcome of a four-hour customs line (that's the average wait time on weekends, according to a recent study led by various travel advocacy groups). At London's Heathrow, queues move a lot more quickly, and that's largely because EU citizens can enter through a separate line without any restrictions. If Brexit passes, those travellers could potentially join Americans and other international travellers in one queue for non-UK citizens.
Charlie Leocha, president of consumer advocacy group Travelers United, said that if Brexit passes, "getting in and out of the UK will be an absolute horror show." As a member of the committee that helped raise funding for the installation of automated customs and border patrol kiosks in major American airports, he knows how long it can take to come up with solutions for these types of problems. "Improving the process for customs and immigration in the US took major cooperation from airlines and airports over an extended period of time. The problems we've had with this in the US are going to replicate in the UK - and it's going to be a mess," he said.
But others are more optimistic; Luke Petherbridge, public affairs manager for the Association of British Travel Agents (ABTA) and a co-author of the report "What Brexit Might Mean for UK Travel," isn't particularly worried about this point. "We can't see that it would have any significant impact," he said about the potential for expanded customs controls. "If you needed a visa before, you will still need a visa. And we expect that there would be an allocation of resources from the UK government to adjust for any passenger influx at customs and border patrol."
On the other hand, arriving by train or ship shouldn't change at all.
"If you travel through the tunnel from London to Paris, you go through French immigration in the UK and then through UK immigration in France-that's how it works currently, and there's no reason why that should change," explained Petherbridge, who also offered reassuring words about cruise travel. "You've always had to show your passport at port on a cruise ship-that should be no different."
Travelling to Europe may be cheaper ?
The finance world is bracing itself for economic turmoil next week should Brexit pass. The general consensus is that the British pound would take a hard hit on the heels of a split, which would have a domino effect on global economies. For internationals visiting the UK, it would likely translate to preferential exchange rates and more affordable vacations. Compounding matters is the possibility that EU nationals will also curtail their frequent visits to England; the travel booking site TravelZoo conducted a survey that revealed one in three Europeans would be less inclined to travel to the UK following a leave vote.
Reduced spending power in the UK also has its ramifications across Europe. According to the ABTA's report, compiled with Deloitte, UK citizens spent 19.76 billion, or $28 billion, on outbound travel throughout the EU in 2014. Industry estimates put 10 million British travellers in Spain each summer alone. Ripple effects could create deeply discounted vacations across the entire Mediterranean, particularly in British-favoured destinations such as Ibiza, Mallorca, Tuscany, and Provence.
"This could be a good summer for Americans to head to Europe," advised Leocha. Or next summer: Since many Brits will already have travel plans in store for this summer, it'll take until 2017 to see the real effects of a reluctant British traveller base.
But affordable airfares may be harder to find.
Under Single European Sky legislation, any carrier based in the EU has the guaranteed right to operate freely throughout the continent. In the event that Brexit passes, carriers such as British Airways and EasyJet (which are based in London and Luton, respectively) will have to renegotiate their bilateral agreements with the EU to continue flying into Europe.
Consumer protections may take a dip ?
The EU has unrivalled consumer protections for travellers, compensating them on anything from delayed flights to cancellations due to natural disasters. That will continue for passengers (including non-EU citizens) on flights on European-based carriers to and from the EU. UK-based carriers will have to decide whether to live up to EU standards or chip away at consumer rights-as American carriers have done. Flight insurance providers such as Berkshire Hathaway may emerge as the winners here.
And so might (some) travel taxes.
On a recent phone interview, ABTA's Petherbridge explained that the EU currently imposes a strict cap on Britain's value-added tax (VAT), which would be up for revision following a leave vote. But there's also good news about travel taxes. Under current EU policies, any flight departing the EU pays departure taxes as dictated by the individual countries. Considering the heavy entry taxes at Heathrow, it should come to no surprise that the UK is one European country that levies a departure tax as well. As Petherbridge puts it, passengers on domestic UK flights pay this tax twice-since they technically depart from the UK, and thus, the EU, on two occasions. At up to 26 ($37) per flight, this could add up to a savings of more than 200 for a family of four flying within the UK.
Little things, like phone roaming, could cause big headaches.
The EU has made big strides in reducing the cost of mobile data roaming-currently there are strict caps on roaming charges, and by April 2017, the concept of roaming will be completely obsolete across the continent. For internationals, that means one European SIM card has been enough to guarantee connectivity (without the excessive bill) from Portugal to Poland. That may no longer be the case if and when the UK switches over to an independent mobile network.
Beaches are another small but potentially pervasive concern for travellers and U.K. residents alike, as the EU has a series of exacting requirements that relate to coastal clean-up efforts. Whether those will be maintained in the face of economic decline is up for debate. The fate of locally beloved foods may also be hanging in the balance.
The big picture is still to be determined.
Even without taking into account the number of Brits who have vacation homes across the Mediterranean, ABTA reports that 1.3 million UK citizens live in other EU countries. Those homeowners account for millions of passenger seats on EU flights on their own-a single carrier estimates 2 million seats-while their friends and family members add nearly 9 million visits, according to ABTA and Deloitte. All this is imperiled by questions about homeownership rights that arise from a potential Brexit.
In the event that these rights are revoked or halted, there may soon be a glut of Mediterranean vacation homes coming to the market. But that's unlikely, said Petherbridge. "The economic impact of abandoning those [expat] communities would be huge, so there's a big incentive to continue some amount of cooperation," he said. Still, he added that it would be "impossible to gauge how receptive either side would be at this point."
That uncertainty is a running theme across all these issues, which hinge on sheer speculation until after Thursday's vote. Even if the resolution passes, both Leocha and Petherbridge estimated that it would take two years to address the tangled web of concerns that could arise from the split.
The ABTA hopes that's not the case. According to its official position, "the risks and uncertainties associated with the UK leaving the EU, both economic and regulatory, outweigh any potential upsides for travellers or travel businesses."