Brexit reality has rocked global stock markets and slayed the pound, but Asian BTMICE players are not feeling the pinch yet. By Karen Yue
In the days after the UK’s historical vote on June 23 to leave the European Union, leading global travel companies have reported neither sharp falls in business travel traffic nor postponements or cancellations of business events originating from the UK.
Carlson Wagonlit Travel (CWT), BCD Travel and Hotel Reservation Service (HRS), have all reported no significant changes in business travel by their clients in the UK over the final days of June.
The impact on business travel has continued to be slight in the following weeks.
While Bertrand Saillet, general manager of FCM Travel Solutions Singapore, shared that “a level of uncertainty and a slight downward trend in business travel” had emerged over time, he said there isn’t yet a “clear trend for business travel to and from the UK”.
“Corporate travel is usually linked to market conditions, so with the uncertainty, businesses are watching their spend more cautiously and when this happens, business travel is usually the first to be scaled back. This is more apparent now in the finance and investment sectors, where most trading is conducted in pounds,” Saillet explained.
But because most business travel plans are pre-determined (and essential for) ongoing business discussions, corporate traffic from the UK into Asia will carry on as usual, according to Saillet.
BCD Travel is also “preparing for some volatility” as clients may take a “conservative approach to internal travel and small meetings”, according to Greg O’Neil, president – Asia-Pacific, but the company is not “adjusting annual projections for volume”.
Still, the uncertain economy will cause clients to approach travel negotiations with greater care, resulting in tougher negotiations and higher demand for cost-savings, opined both FCM and HRS.
No impact yet on meetings
It is still early days for regional MICE experts to diagnose Brexit’s impact on meetings and events coming from the UK into Asia, but a tinge of apprehension exists.
Arokia Das, senior manager at Luxury Tours Malaysia, thinks a slowdown in corporate event bookings is on the horizon, as companies will be cautious about spending and may wait until the economy and political situation stabilise.
And should demand for corporate meetings be affected, O’Neil and Saillet agreed that small meetings would take the first hit.
O’Neil explained: “Companies tend to drop small internal meetings first because those are planned closer to the time of the event and often can be (replaced) using virtual collaboration technology. Larger meetings typically include costly cancellation policies, so we expect them to proceed.”
On the corporate incentives front, SITE past president, Paul Miller, has urged calm, saying: “It is critical that our industry maintains a ‘keep calm and carry on’ approach in order to minimise any potential impact on incentive travel programmes and other business events.”
And calm is what Diethelm Travel Group is feeling right now.
Lisa Fitzell, group managing director of the inbound specialist with operations in 12 Asian countries and which is strong in the European market, told TTGmice that it is business as usual with her UK clients.
“We have had no cancellations and bookings have not slowed down,” Fitzell said, adding that enquiries for future events in Asia have not been put on hold.
Fitzell, who held client meetings across the UK in the two weeks following the Brexit vote, found that key clients were not changing their forecasts for 2016.
While she expects softer bookings in 2017 due to the weak pound, she opined that “Asia is still placed better than the US, Australia or New Zealand (as a destination) due to the value it offers”.
SITE Asia-Pacific president, Rajeev Kohli, also reminded his industry peers that “British travellers tend to be very resilient and, after a period of adjustment, we should see a degree of normalcy (in outbound travel) return.”
Rosy prospects the other way
It is a different story with inbound travel to the UK.
David Tarsh, managing director of UK-based Tarsh Consulting, which serves many in the travel industry there, said: “Brexit brought a slump in the value of the pound. Overnight, hotel rooms, taxis, restaurants and all visitor attractions in the UK are better value.”
Companies holding events in the UK would benefit from being able to attract a larger attendance with the softer currency, opined Saillet.
“This means we are able to offer our clients more event options that fit within their budget. Our clients are also looking to extend their business trips in London because it is now more affordable to do so,” he said.
A HRS spokesperson also agrees that the weakened pound will lead to increased demand for the UK, as cost of business trips and meetings will be lower.
Dynasty Travel, one of Singapore’s leading outbound specialists with a business events arm, has already reaped the rewards of Brexit’s pound slaying.
Spokesperson Alicia Seah said corporate event bookings for the UK have leapt 15 to 20 per cent within a few weeks. These are slated to take place between September and December.
Seah added that dual city itineraries, such as those combining London and Paris, are giving way to more UK-only programmes as clients hope to take full advantage of their new buying power.
“Travellers are opting to travel beyond London to less explored parts of the UK, such as Ireland and Scotland,” she said.
“The UK is popular among Singaporeans. If the pound continues to weaken, we can expect even stronger demand in the coming spring/summer months,” Seah concluded.
