Essential updates for the travel, tourism and hospitality sectors

During this event the discussion and presentations were heavily Brexit focussed, with particular areas of concern being access to talent, ease of access between the UK and EU countries and FX risk.

PSD2

After an opening introduction from Richard Harrington (the current chair of the community) Simon Bunce (Director of Legal Affairs at ABTA), highlighted how 2018 has resulted in a myriad of legal issues for the sectors including the introduction of GDPR and PSD2. The latter, a new payments directive from the EU, prevents traders from charging transaction fees to consumers for taking payment by credit or debit card. This will put a squeeze on margins, as well as create the possibility of payment costs being passed on to the end customer through increased prices.

Package travel regulations 2018

Bunce also highlighted how new regulation around package holidays (effective from 1 July 2018) can result in one trader (eg a hotel or attraction provider) upselling third party services (car rental, tourist services, transport services )  and being liable for the overall performance of all services, as well as being required to take out insolvency protection.

Passport Control

During a Brexit focussed presentation Nikki Spoor (Director at White Hart Associates) pointed out that irrespective of the outcome of Brexit negotiations, it will take significantly longer for travellers to pass through UK and EU borders. It is also possible that the UK becomes specified as a third country, with visas being required to visit EU countries.

No deal Brexit

Should a no deal Brexit take place, aviation will not default to WTO rules due to it being excluded. This means that UK and EU licensed airlines may lose the automatic right to fly between the UK and EU. In order to overcome such a barrier, goodwill will need to be ensured from both sides.

Another potential implication of no deal Brexit on aviation is luggage needing to be rescreened in EU hub airports due to the EU not recognising the UK aviation security system.

Exchange rate implications

Spoor also indicated that the volatility of sterling means that businesses will have to apply a forex hedging strategy for being able to manage risk from adverse currency movements. She also pointed out the importance of revisiting supplier commercial agreements to check their flexibility should a service become unsustainable due to adverse currency movements.

Access To Talent

The main issue addressed by Kate Nicholls, CEO of UK Hospitality, was around access to talent within both hospitality and the high street at large. Many migrant workers have already departed the UK in the run up to Brexit day.  Additionally, the weakening of sterling has also made employment in the UK a less attractive option for these workers who have historically sent a proportion of their wages to their home countries. Nicholls stressed the importance of championing the sectors as being attractive places to work for people of school leaving and university age.

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