The Christmas and New Year period sees most commentators either reflecting on the events of the last 12 months, or looking forward to the possibilities of the next 12 months. Since I suspect that 2015 may bring some interesting outcomes in the political arena, I am going to look ahead.
The news headlines for the next 6 months will probably be dominated by 2 election campaigns and their outcomes. Obviously, the UK goes to the polls in May in what may be the hardest fought, and least predictable election for some time, but before that, the Greeks will have also voted, and their elections may help determine the future of the Euro – something which is of interest to most of us in travel.
Tourism is a key industry in Greece, with the World Travel and Tourism Council estimating that it constitutes directly some 7.4% of Greek GDP, but in all, representing 19.1% of total GDP, and 21.4% of total employment. Despite this, until relatively recently, the Greek government paid little real attention to tourism, with Tourism Ministers rarely surviving more than a year. However, since 2012, there has been a level of stability, with one Minister, Mrs Kefalogianni staying in post, and I would suggest that it is no coincidence that in the same period, Greek tourism has performed strongly.
However, after some political stability, the Greeks face an interesting choice in their elections, due to take place in late January, with political commentators predicting that the left wing Syriza party will gain a number of seats, and even potentially win the election. This is important, as Syriza is primarily campaigning about the Greek austerity programme, imposed as a result of their economic difficulties. Syriza says that if it wins, it will renegotiate the terms of the Greek bailout, end the austerity programme, and write off part of Greece’s debt. The concern is that this will not be acceptable to the European Central Bank or to other EU partners, and may ultimately force Greece to leave the Euro – something which has been predicted by a number of commentators over the past 5 years without ever coming to pass. Whilst a change from the Euro to another currency is in theory little more than an administrative process if handled well, there is a real risk that any such change won’t be handled well – and depending on timing, this could easily have a negative impact on tourism. At the very least, political instability in Greece could lead to customers not wanting to risk booking holidays there pending resolution of the uncertainty.
So even if we cannot influence the outcome of the Greek elections, as an industry, we need to watch closely, and be ready to respond – our biggest problem will be knowing how and when to respond!
As a side note, the Greek political situation is already having a big impact on the Euro, and in the short term, at least, is likely to result in Sterling strengthening against the Euro. This should benefit outbound tourism, in that holiday prices in the Eurozone may fall, and spending money may go further. This could also encourage a small decline in the popularity of All Inclusive holidays, as tourists see that they can get good value eating and drinking out – that may take longer to work through to the market though.
As UK businesses, we can have more influence in the UK General Election, scheduled for 7th May 2015. Tourism rarely appears directly on political party manifestos, but the outcomes of the election may well be important for our industry: with a number of policy areas likely to affect all of us, whether inbound, outbound or domestic. I will return in a later blog to talk about some of those issues, but at this stage would simply highlight the fact that the Airports Commission will be reporting post election on the future needs of UK aviation. The political wrangling on whether any proposals will then get implemented will probably take up most of the life of the next Parliament. In addition, we have seen chinks of light in government policy on Air Passenger Duty during this Parliament, and that may continue to be a political hot potato over the next 5 years.
However, of more immediate interest is what is likely to happen in the elections. This will be one of those rare elections where no politician can feel entirely confident as to their election prospects. The Lib Dems seem to have had their election chances badly damaged by being Coalition partners, if the results of the European elections in 2014 are anything to go by. The rise of UKIP is also impacting on both Labour and Conservative – as they are appealing both to the traditional right wing Tory voters, and to traditional Labour voters worried about job prospects. Whether that results in UKIP winning many, if any seats in the election remains to be seen, but it will definitely make those campaigning during the elections seem desperate to secure every vote they can.
This means that for once, we all have the opportunity to persuade politicians to listen to our concerns. There has probably never been a better time to contact your MP or other candidates – if you can demonstrate why you are important to their constituency (and travel businesses are often big employers, as well as providing services that most voters want – their annual holiday), you should be able to get the politicians’ ears, which should be beneficial post election.
Now, more than ever, we need to have a clear and simple set of messages that we can communicate to politicians – so our trade associations need to publicise these quickly, and we should then all go and bang on the doors of all the political candidates as soon as possible.
 For more details, see WTTC website: http://www.wttc.org/focus/research-for-action/economic-impact-analysis/country-reports/