WTM 2016: Sterling slump followed by price drops, says economist

WTM 2016: Sterling slump followed by price drops, says economist

There is already evidence that the post Brexit slump in the value of the pound is seeing prices for overseas holidays come down to bolster demand.

Economist Adam Dent, a research analyst for Spanish bank Santander, told a World Travel Market breakfast event co-hosted with the Travel Trade Consultancy, consumer behaviour post the June referendum was already changing.

He said September saw the biggest increase in the cost of domestic holidays in the 30 year history that data has been kept while overseas holiday prices fell by the most in that time.

"Record falls in foreign holidays and record rise in domestic cannot be a coincidence," he said. "We see this as the staycation effect - UK holidaymakers worried about how far their pound will go overseas shifting towards UK hotels."

Dent said this has seen UK hoteliers raise prices while overseas suppliers are having to reduce prices to tempt people overseas.

"This shows behaviour is adapting already and so far nothing has actually happened about Brexit," added Dent.

Thomas Cook UK and Ireland managing director Chris Mottershead told a debate on Brexit at WTM on Monday: "The UK inbound business is positive for the outbound business because the more people come to Britain the less [British] people will want to stay in Britain because it will drive up the costs for those who stay in the UK and people will see the great value of taking a holiday outside of the UK."

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