Marshall predicts no immediate tourism fallout from UK crisis

The political and economic chaos in the United Kingdom, one of this country’s main tourism markets, is unlikely to negatively affect travel to Barbados this winter season, a local political economist has said.

At the same time, Professor Don Marshall, the Director of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES), said it could be a different story for the next summer season.

“We have to watch for runaway inflation because the middle-class British consumer coming to Barbados will, with a weakened pound, recognise how expensive it is to be in Barbados and it could be a deterring factor for them returning anyway. So, that’s something the policy framers have to keep an eye on,” he said on Thursday in an interview with Barbados TODAY.

The situation in the United Kingdom, described by Scotland’s First Minister Nicola Sturgeon as an “utter shambles”, mushroomed into the resignation on Thursday of Prime Minister Liz Truss after just 45 days on the job.

The end of her market-rattling premiership provided a boost to the pound after one of the most volatile periods for the currency in decades. However, the sterling slipped back slightly, ahead of a potentially divisive leadership race. It stood at $1.12 to the US dollar on Thursday evening.       

Despite this, Professor Marshall suggested that Barbados need not be too concerned about UK arrivals for the winter season.

“The British traveller is not your normal, typical holiday traveller. If you know about British people, they are normally the rank and file, the middle class, they normally invest in their holidays a year, sometimes two years, in advance. So, a number of them would have already made their commitment to travel ever since the post-lockdown period to travel to places like ours in the region,” the SALISES head said.

“There is no real fallout in the immediate circumstance of the coming winter, short of a run on the British pound that would precipitate a cancellation of holidays…. Short of something like that, I expect that everything would run as smoothly as possible.”

The social and economic researcher noted, however, that while arrival numbers might not be down, spending might.

“…. Because with the hit on the British pound, it will take much, much more pounds to convert into local currency or into US currency. You might see an immediate reaction in terms of expenditure,” he said.

Contending that Barbados has been “saddled” with high visitor traffic but low visitor spend for some time, Professor Marshall observed that this has been more acute among cruise passengers than tourists arriving by air.

The optimism that all will be well this winter aside, the UWI academic cautioned that if the political crisis in the UK is not resolved by the first quarter of 2023, Brits are likely to abandon their holiday travel plans to Barbados and other Caribbean islands.

“We’ve got to hope that between now and April next year, that there is a return to some degree of normalcy and, in particular, that Ukraine-Russian war. I don’t even think if there is a general election period [in the UK] and Labour comes to office, if the internal environmental factors remained the same. . . you would have that much restoration in confidence,” he suggested.

“We just have to hope that the Ukraine-Russia war is not prolonged to the extent to which we would see all the factors that lead to runaway inflation, not only in Britain but all over the world. If this continues, it could spell bleak prospects next summer….

“I do believe if there are some changes or adjustments in the Ukraine-Russian war, or if there are some medium to long-term solutions to accessing cheap sources of energy or fuel, we may see a resurgence in economic confidence. But at this point, with the Tory government in place, I do not anticipate that we would see a rallying of the British economy anytime soon,” Professor Marshall added.

Meanwhile, Chief Executive Officer of the Barbados Hotel and Tourism Association (BHTA) Geoffrey Roach remains optimistic for the winter season, saying bookings continued to look strong.

He added that it was too early to say what the ongoing political and economic crisis in the UK would mean for Barbados’ tourism industry.

“We haven’t assessed it at this stage,” he said in a brief interview with Barbados TODAY, adding that he had not yet “flagged” any specific concerns in relation to the chaos in Britain.

emmanueljoseph@barbadostoday.bb