The Way that Brexit Can Affect Irish Tourism

Before any research work is about to be done there is need to identify the compounds of the object of the research. According to Macintosh et al (1995) tourism can be identified as an extensive travelling experience which consists from five basic parts, which are transportation, housing, food and drink industry, retail industry and entertainment sector. Therefore, it is rational to consider any alterations to Irish tourism by considering each of those sectors separately at first and based on contribution of each of them conclude on the way that Brexit can affect Irish tourism in general.

Introduction

Transportation sector is very important for tourism industry of any country. Therefore it is not surprising that Ireland is no exception for this pattern. In addition to that, aviation should be considered as the most significant one here. However, the role of the railway in contributing to Irish tourism should not be omitted from the view as well. In addition to that, tourism in Ireland is also definitely dependent on the freight economy, therefore not only passengers’ transportation plays role in this research, but so does freight one.

Aviation

Tom Ferris (2017) in his report on Implications of Brexit on Ireland’s Transport Sectors states that in 2015 Ireland hosted almost 30 million international visitors that arrived there by air. There was no other country than UK that send most of its tourists to Ireland (11,5 million people, almost 40 per cent of all visitors). It is important to understand that such high numbers were affected by the fact that EU has the least amount of regulations for air passengers on its own territory. The latter can be referred as European Common Aviation Area (ECAA), according to Commons Library Briefing (2018). Since ECAA was established, the fairs for travelling by air throughout EU countries decreased by 40 per cent, the air fare index has gone from 100 to 50 from 1997 up to 2010 (House of Commons, 2018). So now those numbers are about to rise if Brexit process is about to be conducted in a harsh way. In other words, due to the fact that in 2015 UK was still a part of EU, the numbers of tourists to Ireland from Great Britain are expected to diminish if British government cannot find an agreement in negotiations with EU.

There is no doubt that each of three parties in this case are eager to find an agreement that saves current numbers in air transportation (Ferris, 2017). However, there is another problem to be faced (House of Commons Library, 2018) and it is the fact that UK has to find agreement with each of 27 countries of EU before any policies are about to be accepted or altered in the favor of anybody. This process can take some time and potentially it can result into higher fare for air travel between UK and Ireland and this can result into the cut in British visitors of Ireland, who comprise 40 per cent of all visitors nowadays. This can be already seen in the fact that according to Foley (2017), in the first half of 2017 the number of UK tourists has already dropped by 6.4 per cent. Therefore, the further losses of UK tourists can be expected.

Nevertheless, in March 2018 Business, Energy and Industrial Strategy Select Committee outlined that UK is not looking forward to withdraw itself completely from the European Aviation Agency (House of Commons, 2018). Therefore it can be supposed that probably UK is looking forward towards finding an agreement with EU as an option. However, it should be mentioned that there is one other two options for Great Britain to consider. The second one is to follow the example of Switzerland, which has an individual way of dealing with EU as a country which rejected membership, but still shares some border rules for transportation with it for the convenience of both sides. In addition to that, there is of course a third option of completely rejecting any negotiations and regulating aviation based only on its own terms with EU countries. Fortunately, there are no projections where such negative (for Ireland) way of things are about to happen.

There is one more factor that adds to the problem and it is the contribution of US and Canada to UK’s air transportation. Since UK is running through its one of the most difficult phases it has to redefine its economic relationship with both of those countries as well. Therefore, if UK finds a more favorable agreement with US or Canada regarding the open sky policies, it means that EU’s ECAA can becomes of a less importance for British government. In this case, the most suffering party would be Irish aviation and as a result its tourism sector. Moreover, even if those agreements are about to be found in 2 upcoming years of Brexit process, the amount of paperwork that needs to be performed for the proper documentation of it will in any case add to the cost of new transportation system between UK and Ireland. Hence, it can be definitely stated that Ireland’s air transportation is going to suffer from the shortage of British tourists, the only question is how large-scaled are going to be those losses.

One more important point to consider is recreational aviation inside the island of Ireland itself. According to House of Commons Briefing (2018), there are no changes on the horizon for this sector. The main reason is that it is already controlled by EU mostly, and Brexit should not affect it. However, it can be supposed that if the most unfortunate scenario of negotiations ending happens, then EU will probably alter its policy on recreational aviation as well. This is an important point, because as Failte Ireland (2017) reports, in 2016 12 per cent of the whole tourism spending was on internal transport. This one more time brings to the point that Ireland’s tourism sector is highly dependent on how EU and UK negotiations end.

Railway

Touching on the matter of transportation cannot be proceeded without mentioning the railway transportation. The most important point here is considering the example of Channel Tunnel, which is the fast train that connects France and UK. In the light of the current research, it is the quickest way of reaching Europe from UK because as House of Commons Briefing (2018) suggests, there are no possible changes to its police or fares until 2086. The reason for that is the fact that it is under control of Channel Tunnel Group (Eurochannel), so no Brexit implication would affect it. This can create some issues for Ireland tourism, since if aviation fares will get higher, some parts of the UK tourists can choose Channel Tunnel as their way to visit Europe. That means that some proportion of UK tourists can simply skip Ireland in the list of their destinations if Channel Tunnel remains as the fastest, and potentially the cheapest way to reach Europe.

Freight

Considering the transportation cannot be considered without taking into account how it affects the trade process between countries. Moreover, it cannot be omitted how trade between countries affects the tourism sector. In addition, this part of the analysis refers to road and water transportation, the sectors which are not covered above. On a long term, the changes in trade between UK and Ireland after the process of Brexit will be completed are inevitable. Of course those changes are not going to be positive for Ireland’s custom costs and tariffs, which are directly connected to the cost of tourism in Ireland. According to report by Copenhagen Economics for the government of Ireland (2018), there are 4 scenarios for how Brexit will affect trade between EU and UK and how it will affect Irish economy. The best of those has projections of a 7 per cent rise in tariffs and costs between Ireland and UK, while in the worst one that increase can be equal to 24 per cent. This leads to a logical conclusion that Irish tourism will suffer from Brexit not only by losing tourist from UK, but also from higher prices on goods that are transported from Great Britain. However, it also should be mentioned that the same source suggests that GDP of Ireland is not going to diminish, but rise in the near and distant future. Alas it should be admitted that the rate of that rise will be much less active due to Brexit. The implications of potentially rising tariffs and custom costs on Irish export and import will be discussed further in the section about how retail sector affects tourism in Ireland.

Recap

All in all, it can be definitely stated that Brexit will negatively affect Ireland’s transportation sector, which in its own turn will have negative impact on Irish tourism. The numbers of UK tourists are already diminishing, while EU and UK has no possible conclusion on the way to the negotiations on ECAA rules. Besides from problems that aviation is already causing and can cause, the Channel Tunnel train can make the numbers of tourists to Ireland drop as well. However, it should be noted that there are no precise numbers on how large the losses of UK tourists will be since policies are still in the process of being negotiated. Alterations in freight transportation are also potentially causing some issues for Irish tourism since the least increase in tariffs and custom costs is about to be 7 per cent, while the worst projections suppose a rise of 24 per cent. All of these is affecting Irish tourism is due to the fact that 40 per cent of all tourists in previous years were comprised from visitors from United Kingdom. Therefore, it can be definitely stated that Irish tourism is going to suffer from Brexit if you consider how it affects its transportation sector.