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Aussies to enjoy cheaper British holidays

Press AssociationPress Association 27/06/2016
London Trafalgar Square © Photofusion/Rex Shutterstock London Trafalgar Square

Britain has overnight become a more affordable tourist destination, while Brits travelling overseas will feel the currency bite in the short-term.

While many UK holidaymakers travelling abroad will pay more for foreign currency as a result of the Brexit referendum, foreign tourists can enjoy cheaper holidays in Britain - at least in the short term.

The pound plunged to its lowest level since 1985 following the EU referendum on Thursday, with the sterling down against every single major currency group.

This could make the UK a more affordable destination for overseas tourists.

The Australian dollar, meanwhile, plummeted against the US dollar and soared against the pound after Thursday's result.

Commonwealth Bank chief currency strategist Richard Grace warned the Aussie could keep falling until month-end because of the large falls set to occur on the world's major share markets, as a lot of local asset managers are over-hedged on their offshore asset exposure.

If the UK is separated from the EU, an extra visa may be required for Australians, who will be forced to get one stamp for Britain, and an additional one if they wish to travel onto Europe - or vice versa.

But the victory for the Leave campaign is unlikely to have any immediate ramifications for UK tourists passing through immigration controls abroad, or for inbound tourism.

A spokesman for Heathrow Airport said: "Anyone travelling through the airport will find it operating normally with no changes to security and immigration."

Bill Gibbons, director of industry body Discover Ferries, which represents 12 ferry companies, insisted that the vote will not have an impact on summer travel plans.

"Ferries will continue to travel as normal and there will be no changes to routes or schedules," he added. "It will be business as usual."

The London Eye viewed from Westminster Bridge © Tim Grist/Moment /Getty Images The London Eye viewed from Westminster Bridge

Joel Brandon-Bravo, UK managing director of travel deals company Travelzoo, warned that the referendum result would have an impact on the tourism industry in several ways.

He said: "The next 24 months of negotiations will be crucial for British travel - particularly if the UK government wants to maintain inbound tourism from the EU, and avoid a price hike for Britons wanting to travel abroad for holidays.

"Obviously top priority is dealing with the impact the referendum result will have on the value of the pound, but there are other factors that could make the result a big blow for the travel industry."

Brandon-Bravo urged the government to quickly negotiate how an independent UK will operate in the European Common Aviation Area.

Travel organisation Abta warned during the referendum campaign that foreign travel was "likely to become more expensive" for Brits following Brexit.

It published a report which stated that British holidaymakers and business travellers may face increased costs if an exit vote leads to a fall in the value of sterling, while travel businesses may also raise prices in order to recoup the cost of new taxes and levies being introduced.

Another potential factor which could make travel more expensive is consumers needing to cover additional insurance costs if the UK leaves the European Health Insurance Card scheme, according to the report produced with economic analysis by Deloitte.

The research concluded: "In the longer term, following a Brexit, travel is likely to become more expensive."

Andrew Swaffield, chief executive of low-cost airline Monarch, responded to the study by saying that the UK leaving the EU could lead to an increase in air fares and a reduction in the number of flights.

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