RAK CEO keeps a "close eye" on Brexit effect
Following the devaluation of the pound, Brexit could eventually affect the number of UK visitors coming to the Middle East
The EU referendum in the UK, known commonly as “Brexit”, saw the people of England, Scotland, Wales and Northern Ireland vote on whether the kingdom should remain in the European Union. Since the referendum result to leave the EU was announced on July 24, the British pound has dropped to its lowest value since 1985. Just as the devaluation of the Russian ruble was felt by hotels that were dependent on Russia as a key source market, the devaluation of the pound could affect those hotels in the Middle East that rely on visitors from the UK. For Ras Al Khaimah, which recently announced its target of 1 million visitors by 2019, the UK represents its third largest source market. In 2016, visitor numbers from the UK have grown by 30% year-on-year. Speaking to Hotelier Middle East, Ras Al Khaimah Tourism Development Authority CEO Haitham Mattar said that the emirate had not yet felt any post-Brexit impact on visitor numbers from the UK. However, Mattar suggested it was currently too early to see the full effects, if any, of the drop in the pound. “We haven’t seen any impact, yet,” Mattar told Hotelier. “One of the reasons, you have to appreciate, is that British travellers do book quite in advance, and do pay in advance, and take advantage of advanced booking discounts. They are one of the most experienced travellers when it comes to booking and paying in advance. So we haven’t seen any declines so far, at least for the summer months.”
“If you look at the population in the UK, who would the economy really impact, which generation, and who are the most travelled today…Taking the example of Germany as a comparison, it is the older generation that tend to travel more. A lot of them have great pensions, and a lot of planned savings. So in the UK, this older generation who actually voted for Brexit, will probably continue to grow in travel, in my view.”
While the UK represents RAK’s number three source market currently, Mattar points out that visitors from the UK still only represent 8% of total visitors to Ras Al Khaimah.
“If you look at our portfolio today, with different markets, and new markets, should that actually decline further, we should be able to replace it by other markets,” Mattar said. Other top source markets for RAK, which could replace the UK, include India and Germany (currently RAK's number two and number one source markets, respectively), as well as new and emerging source markets such as Kazakstan, the Czech Republic, Finland, Sweden, Poland and China.
“Whether we see a decline or not in the future, I think, that is something to keep a close eye on,” Mattar concluded.
Read the full interview with Ras Al Khaimah Tourism Development Authority CEO Haitham Mattar in the August issue of Hotelier Middle East.
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