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Brexit threat to London as business travel destination, says survey

London is in danger of losing its reputation as a good place to do business because of Brexit according to research
08/11/2017

Pictured: 20 per cent of inbound arrivals to London and more than 30 per cent of spending in the city is business-related

London is in danger of losing its reputation as a good place to do business because of Brexit, according to research for World Travel Market London.

The Top 100 City Destination Ranking WTM London Edition, by Euromonitor International, states that London is a globally recognised leisure and business hub, with the city creating more than £420 billion in value added during 2016. However, the city’s attractiveness for business services is under pressure post-Brexit.

“Brexit threatens to undermine London’s dominant position for ease of doing business and its attractiveness as a start-up hub. Competing cities that have emerged to steal its crown include Paris, Frankfurt, Berlin, Stockholm, Dublin and Amsterdam, based on transport connections, diversity and creative spirit,” said the report.

Generally, 20 per cent of inbound arrivals to London and more than 30 per cent of spending in the city is business-related. Business travellers spend twice the amount their leisure counterparts do.

London Mayor Sadiq Khan launched a major campaign, #LondonIsOpen, to show the city is united, welcoming and open for business to the world following the EU referendum. The campaign, the report states, is ‘critical to ensuring the message is heard loud and clear so that business continues’.

With the government triggering Article 50 in March this year, the UK is set to leave the EU by March 2019. The extent of the Brexit effect on business travel to London depends on the final deal.

Euromonitor warns that, even if a free trade agreement is reached, there will be other regulatory and non-tariff trade barriers, as well as the loss of EU passporting rights for the financial sector.

The ‘soft Brexit’ scenario would see the UK government relaxing its negotiating position over immigration in return for access to the single market and passporting rights to preserve London’s financial sector.

“Under this scenario, UK GDP would grow, positively affecting outbound travel, but dampening growth in inbound arrivals,” said the report.

A worst-case scenario would see the UK leaving the EU without having reached a new free trade agreement, with trade relations defaulting to WTO conditions.

“This scenario would lead to a long-term decline in UK GDP growth. The impact on departures would be negative, but arrivals would grow,” said the report.

The warnings highlighted in the Euromonitor report are shared by other players in the travel industry, including campaign group A Fair Tax on Flying, which has been calling on the Government to make a ‘decisive cut’ in Air Passenger Duty to open up new routes to emerging markets after Brexit.

Campaign spokesperson Karen Dee said: “It puts the UK economy at a severe competitive disadvantage in the very markets we need to trade with post Brexit when compared to our European neighbours.

“We need a decisive cut in APD to open up new routes to emerging markets and make it easier to build up trade and to make the UK an even more welcoming destination for foreign business travellers, many of whom invest here.”

World Travel Market London, Senior Director, Simon Press, said: “No-one knows the outcome of the Brexit negotiations and what effect leaving the EU will have on London, although, as this fascinating report shows, there will likely be challenges ahead for the city in terms of attracting business travel.

“But London has been a major trading city for centuries, and has adapted to change with the times on numerous occasions and will no doubt do so again after Brexit.”

  • Anonymous user 09/11/2017

    Stop Brexit


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