Sep 2016 Financial News

Barbados Feeling Brexit Blow

Sep 22, 2016

BRIDGETOWN, Barbados, Thursday September 22, 2016 – Barbados is beginning to feel the impact of the vote by Britons to leave the European Union (EU), with tourism’s private sector reporting a fall in financial returns.

While not providing figures, Chief Executive Officer of the Barbados Hotel and Tourism Association (BHTA) Sue Springer yesterday revealed that British visitors to Barbados were spending less since the vote, due to the sliding value of the pound sterling.

Addressing the association’s quarterly general meeting at the Hilton Barbados Resort, Springer explained that while arrivals from the island’s primary source market have not declined, there was evidence of cut backs in spend.

“The rate of exchange for the pound sterling is beginning to have its effects, especially on some of our attractions. The UK visitors seem to be . . . cutting back on what they are doing. I have always said that I have seen people [tourists] at the bus stops but I have been seeing even more people over the last few months,” the BHTA executive said.

The value of the pound fell to a 31-year low immediately following the Brexit vote on June 23, crashing below US$1.30 after losing ten per cent of its value. Yesterday, it closed at US$1.30, down from US$1.50 on the day before the vote.

Predictions by analysts that the UK economy would grind to a screeching halt, or even shrink if the British had voted to leave the EU have not been realized, however,   with official figures on the state of the public finances released yesterday showing little impact.

The analysts had warned that businesses and households would stop spending because of job cuts, political uncertainty and a squeeze on living standards as the weak pound stoked inflation. The Paris-based Organization for Economic Cooperation and Development had also issued dire warnings of economic turmoil for the UK in the wake of the vote.

But the economic think tank yesterday softened its warning, stating that prompt action by the Bank of England to cut interest rates had cushioned the blow from the vote.

Nonetheless, it still expects the UK will suffer a sharp slowdown next year amid heightened uncertainty, and the triggering of the EU article that would begin the two-year process leading to the break-up.

It is the uncertainty ahead that worries Springer and other tourism officials in Barbados, which receives more British tourists that any other Caribbean country.

Springer said today the full extent of the impact of the Brexit vote would likely be seen during the upcoming winter tourist season.

“The major selling period for the tour operators in the UK is the six weeks after Christmas. Sales during this period should better indicate what impact Brexit did or did not have on travel from the UK,” she told the meeting.

Brexit notwithstanding, hers was not a picture of an ailing industry, as she divulged positive arrival numbers from other source markets, as well as additional airline seats into the country.

Springer also reported that the industry has recorded a 3.2 per cent increases in long-stay arrivals for the traditionally slow period of August, and that tourist arrivals for the year had increased by 5.5 per cent when compared to the same period last year. (Barbados Today)

Source:
Caribbean360
Thursday September 22, 2016

http://www.caribbean360.com/news/barbados-feeling-brexit-blow