+30% Increase on Ski Holiday Prices & Loss of 25,000 Jobs
Brexit looms above the ski industry as heavily as any other industry in Britain.
Several travel firms joined forces in an effort to shed light on Brexit’s possible impact on agencies working mostly with seasonal holiday businesses, including the ski industry.
Their initial conclusions proved ominous.
A Few Words About SBIT
The group firms that came together and made the survey group is called Seasonal Businesses in Travel (SBIT) and, during the last month has encompassed over 200 outbound British travel firms, some of which stand out as the industry’s leading companies in UK’s Ski Industry, including Inghams, Ski World, Meriski, Ski Famille, Zenith, Alpine Element, Ski Olympic, Stanford Skiing and several others.
SBIT used independent research consultants, namely LHM Conseil, to poll representatives from all contracted companies.
SBIT’s recent survey that stirred up much discussion on Britain’s imminent exit from EU, was based on data from more than 130 different agencies and firms representing a combined £470 million in turnover, and turns the spotlight on the challenges the industry is about to face, whatever the form the Brexit eventually takes or the terms of the exit agreement with the EU.
Without a doubt, the exit will strike a major blow to seasonal businesses in travel sector, both operationally and financially.
According to the recently published report, entitled A Crisis Looming, Brexit and the British Outbound Tourism Industry, Brexit will bring with it an increase of around 31% in holiday prices for snow sports enthusiasts, and approximately 25,000 jobs will be lost in the industry, which are now held mainly by young employees of 18-24 years old.
In terms of revenue, the chain of events leading to EU’s exit door will certainly claim a part of the billion pounds of revenue currently brought to the UK Exchequer each year by the seasonal businesses in travel sector, along with the £16.5 billion the sector contributes annually to the UK economy till now.
The Underlying Reasons
The reasons behind these dim prospects are rather clear to the respondents of the British holiday companies that participated in the survey, most of which are CEOs, MDs or the owners themselves.
First of all, numerous independent UK holiday companies remain cost efficient and offer great packages at competitive prices by employing UK staff to work as their representatives in EU resorts during peak times – a process which, until now, required no visas or bureaucracy, with all staff taxes and National Insurance contributions getting back in the UK.
Since most agencies will cease to employ UK staff on the continent on UK terms – for example, paying tax and National Insurance in the UK for the NHS – and, as a result, will be forced to pay into much costlier continental state social insurance schemes, their operational cost will significantly rise, at a scale of around 58%.
Most British tourists visiting the continent prefer booking with a British agency instead of a local one and love the idea of having a fellow countryman welcome them in the resort, or being serviced by British staff members during their stay in Europe. Naturally, Brexit makes all these preferences harder to meet.
Hence, all Brexit developments and following staffing issues will mount pressure on smaller family-owned holiday businesses, many of which will be forced to close or merge in order to survive.
British employees specialising in tourist services will also find it increasingly difficult to find positions UK agencies and firms, while facing the risk of reduced salaries and much less training opportunities at home, for 60% of the firms surveyed run apprenticeships or training in the UK or the EU for their employees.
Last but not least, the hiring of much fewer Britons as agency reps and staff members will have a rather negative impact on the overall quality of the holiday experiences for millions of British tourists, shaking their faith to the industry’s ability to serve their needs and meet their wishes efficiently, since a high number of British agencies are not in a position to cope with such a cost increase and have neither the experiences nor the mechanisms to properly employ EU nationals.
Travel companies will lose in many other ways from this unfortunate development. For example, experience in customer service, logistics and operations are essential skills of immense importance in a service driven industry and economy. An irreplaceable wealth of knowledge and experience will be lost as soon as British reps stop working in the continent.
The Dawn of Crisis
SBIT’s report makes clear that the forthcoming Brexit has already taken a toll on the sector, as evident in capacity cuts and several closures from British run businesses in the Alps, mainly because of the poor prospects and a total 7% cut in positions available for the upcoming ski season. Considering how most of these agencies make their plans way ahead, at least a year or even more, it strikes as no surprise that the impact is already noticeable.
As stated in the report, programmes have already been cut, and just a third of the agencies that participated in the survey kept their accommodation contracts unchanged. Indeed, the danger of losing a considerable share of the market and a degree of their competitiveness is ever growing. Let it be noted that a 7% decrease in British staff posting overseas has already been noted before the coming season.
A Desperate Plea
Unfortunately, aside from asking all interested parties, both in the British government and the EU officials, to preserve a similar working environment and reach an agreement as quickly as possible, there is little the SBIT firms can do. They also hope that the all current working terms and arrangements will remain unaltered till the end of the negotiations, in an effort to reduce the negative impacts of Brexit as much as possible.
British travel businesses desperately need a boost of operational certainty, and the continuation of free moving of seasonal workers even after next March would be of great help to their effort. Other suggestions include:
- The post-Brexit establishment of a fast longer-term practicable work permit/visa process that will enable UK citizens to work in EU member-states temporarily, and thus serve the needs of the industry;
- Giving British employees working overseas the ability to remain in the UK’s social security system;
- The preservation of visa-free travel in Europe for UK citizens, which will also shield the UK’s aviation industry.
The title given to the SBIT’s report is, if nothing else, well-studied.
Brexit crisis looms over the seasonal holiday sector, and what other issues or problems may result from its conclusion remain to be seen.
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