Monday, 15. August 2016
Two months after the referendum of the Britons, which confirmed the Brexit of the United Kingdom from the European Union by a narrow margin, some of the impacts are already clearly noticeable, others still not yet fully predictable. How the various sectors respond to the withdrawal from the EU was shown in a wide media doom-mongering that suggested a strong shock to the European Single Market, particularly in the automotive industry. Without question, the highly interdependent trade relations between the United Kingdom and Germany are heading towards an uncertain future, because even with a possible free trade agreement, the impact is unclear and the cost of production in the UK continues to be at risk. A similar amount of uproar came from the travel industry, which anticipated the long-term large loss and a drastic drop in the travel motivation to the UK. The share of the tourism group TUI broke in the aftermath of the Brexit by 16 percent due to the many cautions and uncertainties (Spiegel). But what does this actually mean for the serviced apartment market in Germany?
At the moment, we cannot feel a decline in the travel industry. Tourists with the destination UK are benefiting from the weak pound, which had suffered the most rapid devaluation for 60 years immediately after the referendum on the United Kingdom’s membership of the European Union (Ufi Ibrahim, CEO of the British Hospitality Association). This development makes especially holiday trips (and business trips respectively) of the British to foreign countries expensive. So in this year's holiday season far-away beaches are increasingly being replaced by a "staycation" in British homes.
The feared drastic withdrawal of companies from the financial sector and the slowdown in investment, however, have not yet become apparent. Instead, we can see a continued solid investment in the London financial market (DEAL Magazine, 8/15/2016). Should the British pound not stabilise on the long term, it is very likely that, equivalent to leisure travellers, even for the industry’s most important clientele, the business travellers, it will come to savings for bookings due to high costs and hence, the travel volume abroad will decline. According to the market survey of Boardinghouse Consulting, which is published annually and presents important indicators from apartment house operators in Germany, travellers from the UK make up the largest share with 14 percent in addition to those from the United States, also with 14 percent (Boardinghouse Consulting: Market Report 2016, p. 46). This fact might be reflected in shorter lengths of stay in the future. It remains to be seen whether the German serviced apartment market is stable enough to cushion the losses of this particular target group and when these trends will become visible.