With Britain leaving the European Union, beloved destinations could be a bargain—airfares included.
It literally got cheaper overnight for Americans to visit Britain after the country decided to leave the European Union. But exchange rates aren’t the only shift that travelers will see—the Brexit could also impact airfares and hotel rates.
For some time, experts have been predicting the end of passport-free travel in Europe. But the U.K. isn’t part of the Schengen agreement, which allows people to zip across the borders of 26 countries without going through passport control.
There might be more travel hassle in the long term anyway. But the World Travel and Tourism Council, a global industry organization, said in a statement today that the two-year negotiation period following the Brexit means that major policy changes will take place slowly.
In the near future, we could see a slump in airfares. Because the pound and the euro have declined in value versus the U.S. dollar, it’s now more expensive for Europeans to cross the pond.
“The airlines will have to fill seats with Americans,” George Hobica, founder of fare-tracking site Airfarewatchdog.com, told Travel + Leisure. If there aren’t enough U.S.-based travelers heading for Europe, fares and/or capacity will get cut. Investors are worried enough that shares of American, Delta, and United dropped by 3 percent to 4 percent on Friday.
Rates at hotels are already lower for dollar spenders thanks to the favorable exchange rates. Going forward, properties may have more availability, especially if they are dependent on European clients. Prices may come down slightly as a result, Hobica said.
That’s not happening quite yet. Henrik Muehle, general manager of luxury London hotel Flemings Mayfair, said he prices at his hotel haven’t changed. He anticipates that the lower cost of dining and entertainment will likely be a significant draw for tourists. “Now is the time to travel to London because it is now really affordable to come in the summer, and we don’t know how long the pound will be so low,” he said.