How Brexit could change tourism between Britain and the UAE

The UK is likely to see more visitors from the Middle East as a more favourable exchange rate since the vote to leave the EU improves buying power

Weaker growth in UK tourists flows to Middle East expected as Brexit shrinks travel budgets. REUTERS/Suhaib Salem

The number of travellers from the Arab world to the UK is expected to increase as a weakened pound since the 2016 Brexit referendum boosts purchasing power for visitors.

“The exchange rate is very favourable and driving up the numbers,” said Tricia Warwick, director for Asia-Pacific, Middle East and Africa at UK government agency VisitBritain. “We could see a surge in business.

“From a tourism point of view ...  you will get more bang for your Dirham,” Ms Warwick said, in reference to the UAE currency.

VisitBritain, the UK government agency tasked with attracting more tourists to the home of London's Big Ben and Buckingham Palace, is ramping up its efforts to promote holidays to the country.

The agency is seeking to promote to Middle East travellers destinations within Britain beyond London to attract longer stays: from the Lake District for nature lovers; to the Scottish highlands' castles; and northern Ireland, where scenes for Game of Thrones were filmed.

VisitBritain is targeting to attract 825,000 visitors this year from the Arabian Gulf, the UK’s second-most valuable market after the US in terms of spending and length of stay.

As weaker economic conditions in Britain make international holidays more expensive for its residents, there will be a shift in demand from pricey vacations in Europe to cheaper destinations in the Middle East, government officials and analysts say.

However, with a significant British diaspora in the UAE and neighbouring countries, travel flows between the UK and the Gulf states will continue, Ms Warwick added.

She concedes Brexit poses questions for the British tourism industry. "I suppose Brexit is a challenge for the UK and is making us think more creatively," Ms Warwick said. "There's so much choice for travellers that it creates confusion, our job is to make it as tangible as possible on why go to Britain now: the cricket world cup, the premiership football games, the music festivals.

But, she said, “Brexit will be a blip.

"Britain is open for business. It’s great value, a great welcome and a great time to come.”

Each year, UK globetrotters seek the sun and sandy beaches of popular Middle East destinations, with inbound travel flows helped by the increasing number of connections on airlines such as Dubai-based Emirates. Tourism is a major source of income for regional economies such as Egypt and is a key to economic diversification for Gulf countries seeking to reduce reliance on oil.

Holiday operator Thomas Cook and rival travel group TUI are seeing a “huge pick up” in bookings to  Egypt and Turkey, countries that stand to benefit as British travellers seek better value for money outside the European continent, said Harry Martin, a London-based senior associate at research company Bernstein.

“There seems to be the sentiment from consumers of looking away from European countries and this could boost tourism this year into regions like the Middle East,” Mr Martin said.

However, a weaker pound as a consequence of Brexit could make international holidays more expensive for British travellers.

“The overall slowdown of the economy will affect the purchasing power of British tourists, disposable incomes will reduce and hence there will be less money to spend on travel,” said Nikola Kosutic, Euromonitor’s senior research manager for the Middle East.

The British government does not foresee a material impact on the travel flows between the UK and the UAE in either direction. More than 1.5 million British nationals travel to the Emirates annually and nearly 400,000 visitors from the UAE are expected to travel to the UK in 2019, according to the British embassy in Dubai. The UK is the third-biggest overseas market for Dubai, which saw 1.2 million travellers visiting the city in 2018 compared to 1.265 million the previous year, according to Dubai government data.

“The strength of the UK and UAE offer to travellers will continue to attract high levels of visits both ways,” said Stephanie Al-Qaq, British chargé d'affaires at the embassy. “We don’t see this being impacted by any outcome in the current negotiations on the UK’s departure from the EU.”

Euromonitor forecasts that number of arrivals from the UK to UAE will be 1.8 million in 2019 but in the worst-case scenario of a no-deal Brexit, those arrivals could decline by 33,000 visitors a year. In that instance, over the next five years, the volume of British travellers to the UAE could see a cumulative decline of 413,000.

Following the expected exit of the UK from the EU on March 29, British travellers could cut their second holiday of the year, Mr Martin said, although the attractiveness of the UAE during the cold months in Britain will still be a major draw.

“Winter demand may drop off, which can be negative for Middle East destinations but, more likely, the winter sun means it's time to go to places like Dubai,” Mr Martin said.