Brexit impact: It's time to take that dream UK holiday

Britain's exit from the European Union (EU) has given tour operators and overseas education consultants a big reason to smile. The pound has fallen almost 7% against rupee, making the destination cheaper for Indian's visiting the UK for leisure, business, visiting family and relatives (VFR) and studies.

"This will aid our outbound business for the remainder of the year," said Anil Khandelwal, chief financial officer, Cox & Kings, said.

Though the destination has become cheaper, Madhavan Menon, chairman and managing director, Thomas Cook (India) Ltd, said that currently travellers need separate visas for the UK and Europe and this scenario is unlikely to change soon.

Jai Bhatia, chairman, Travel Agents Association of India (Taai), said while Brexit may not be good in economic terms for the country it will certainly be advantageous for Indian travellers looking to visit Britain now. "The airline fares will be lower now. This may give boost to the outbound travel from India to the UK," said Bhatia.

Industry experts said as the UK will aggressively promote tourism sector to attract more tourists. "Tourist visa is expected to get cheaper which is not the case at present. Airlines and hotel industry in Britain may start offering some freebies for it," said Iqbal Mulla, chairman of consultancy group Global Tourism Council (GTC).

In the near term, adding the UK to travel itinerary will be an attractive proposition, said Chirag Agrawal, destination strategist - Europe, TravelTriangle. "It (UK) is otherwise a relatively expensive option compared to rest of Europe. However, restrictions on free travel between EU and UK may come into force in the longer term," he said.

However, Rakshit Desai, managing director - India, FCM Travel Solutions and Flight Shop, said, "As the peak leisure season is already over, we do not foresee very discernible impact of Brexit on global travel to the UK, at least till the next summer. However, for those planning a vacation in the immediate future, the exchange rates are expected to provide for 5-7% savings in package costs."

"Also, as the British summer is still going strong, we would advise any travellers planning an international trip in the near future, to consider the UK as a destination. We do not see any immediate effect on ease of travel since there are no changes in aspects like visa processes," said Desai.

Echoing the sentiments, Sharat Dhall, president, Yatra.com, said that it was too early to establish that this drop in the pound will be sustained. "We are yet to see any surge in travel bookings to the UK. A drop in the pound could also result in an increase in students from India choosing the UK as a destination as it will make education significantly cheaper there," said Dhall.

While Brexit has spelled a big boost for players like Cox & Kings, Thomas Cook etc that are selling the UK as leisure and shopping destination, the companies also said that necessary measures have already been put in place to ensure their operations in Britain are not significantly impacted from this development.

"As far as our operations in the UK in both leisure – international and education are concerned, they enjoy both revenues and costs in the same currency and hence there won't be any impact from the currency movement. Our Meininger hostel business is based in Europe and has both its revenues and its costs based in euros. Hence, there is no material impact from the currency movements," said Khandelwal, adding that the euro is stronger against the rupee on a year-on-year basis anyway.

Thomas Cook (India) said that its various businesses including the foreign exchange business remains fully hedged. "The current volatility will not impact our core business in any way, however we will witness wide spreads in the currency trade for the short term and expect that the market will settle down and currencies will find their own levels. On our product strategy, we constantly review prices in line with the input cost and that will remain unchanged," said Menon.

Commenting on its debt position, Cox & Kings said that some portion of its debt is denominated in pounds, which will reduce in rupee terms with the currency falling. "So the leverage on the balance sheet will reduce. "We do not believe that the UK leaving the EU will have as dramatic an impact as financial markets are making it out to be. The UK will have a transitional period of two years," said Khandelwal.