The second largest portion of visitors to Pinellas County after domestic visitors, are visitors from Europe, at 18%.  This portion of visitors increased 2% in 2012-2013.  European visitors make up a major part of the tourist economy.  Because this is such a large portion of gulf coast visitors, it is helpful to have an understanding of the economy in Europe.  A major change is beginning in the coming months in Europe which could have a big impact on the economy.  “Brexit” negotiations are soon to begin.

You might be wondering what exactly “Brexit” is.  It is a made up word, a portmanteau.  Obvously derived from two words, British and exit, it is a term used to describe the British exit from the European Union.

Britain (the United Kingdom) is made up of England, Scotland, Whales, and Northern Ireland.  The European Union includes a political and economic partnership between 28 European countries. It was founded in 1957 around the end of World War II to foster economic cooperation within Europe.  A major component of the union policy is that countries can only trade between countries within the union.

Brexit was put to a vote in which 30 million people turned out, a 78.1% referendum turnout.  The leave vote won by a majority 52% of the vote.  In the vote results England and Whales favored leaving the European Union, according to BBC news.  Scotland and Northern Ireland voted to stay.  Brexit is the joint exit of these countries from the European Union.  Prime Minister of England Theresa May announced that two years of formal negotiations will begin in March of this year.  The UK is expected to be out of the union by the summer of 2019.

The European Union vote was significant for gulf coast tourism, because the union has rules that regulate trade for the European countries within the union.  These rules could have a long term impact on the value of the pound.  How the pound can be spent in Florida impacts the spending behaviors of visitors. As a friend of my family said while she was here last summer, “I buy all my clothes while I’m here in Florida, because I can get nice stuff for much cheaper than I could in England.”

At the moment, one pound equals 1.24 us dollars.  With the pound in a 30 year slump, there was concern that Brexit would further harm the economy.  Pre-referendum vote (pre-Brexit) the pound was at 1.3.  It dramatically dropped to a low of 1.09 in October. It has rebounded, but hasn’t quite reached pre-Brexit levels.   The long term impacts of Brexit are still unclear.