Event and tourism industry professionals reacted to the news that Britain will leave the EU, with many expressing concern, as Prime Minister David Cameron announced he will step down as Prime Minister and the value of the pound slumped.
C&IT asked the industry to outline the pros and cons of the 'leave' vote, and while the majority of event professionals are concerned about the short-term uncertainty, some were able to find positives.
"I think there are multiple concerns around skills shortage, economic impact, and reduced foreign investment that will impact the events industry," said Alan Newton, founder and COO at Eventopedia. "In terms of skills shortage, let's be clear, we're not going to be losing tens of thousands of workers overnight, but the statistics show that we're an industry heavily reliant upon migrant workers, with the figure as high as 60% in London. More than a third of those workers are in skilled or managerial roles, so we're talking about a generation before we can reasonably introduce the required change in culture, education, and training to plug the gap, and we'll be missing the cultural advantages that go with having an immigrant workforce."
Greater competition from European agencies
"I feel leaving the EU might make competing for European events business more difficult and result in some European HQs moving out of London and using local event agencies for their requirements," said Sam Robson, group events director at The Appointment Group.
Value of sterling dropping
"Any outbound events where the budget is held in the UK will also be heavily impacted by the sharp loss in the value of sterling, which may lead to some events being curtailed or cancelled due to increased budgetary pressure," said Newton.
Uncertainty in the economy
"The major concern about the Brexit from a client point of view is the uncertainty it might bring to the economy," said Shaun Casey, head of events at BI WORLDWIDE. "Clearly a vast majority of MICE spend is considered to be discretionary spend and this might be frozen on a wait-and-see basis. Hence, there could be pressure to postpone commitment and payments."
Knee-jerk market responses
"The markets were informing us pre-vote that they were not favouring Brexit and they've certainly responded in that manner this morning," said Newton. "However, we also know that markets can have knee-jerk responses before recovering, so we have to be patient and allow the dust to settle. This level of uncertainty will, in the short to medium term, have a big negative impact and I'd say all budgetary targets for this year probably have to be revisited.
Leave vote could see a return to export carnets and restrictions
Evcom chairman Steve Garvey says a main concern of Brexit is how it will impact on the movement of people, goods and services around Europe. If export carnets or restrictions of the past return, or visas for European travel introduced, it could have a huge impact on UK companies delivering events within the EU. "We believe it is vital to continue to allow the free movement of people, capital, goods and services between the UK and the rest of Europe. While the UK will remain a member of the EU for some time, it is essential that our members are able to deliver events and produce screen content in the EU after the Brexit process is completed," said Garvey.
A chance to shape things in the industry’s interest
Anita Lowe, founder and chief executive of Venues and Events International, said: "Now is the time to look at what our strategy needs to be. The most important thing we need to do is get the right negotiators involved on behalf of ourselves. They need to come from the events industry itself, some our industry leaders.
"We need to take time to find the right negotiators on behalf of the country - not just politicians, but industry leaders too, to get the right terms for us. If we get the right people on the panel it could be positive for the industry in that we have independence in certain areas we didn’t before. The UK is still a powerhouse and this can give us opportunities, it might be a strong, positive thing."
International companies will still work with us
"We won’t come out of EU straight away, we’re now saying negotiations will start in October and we won't invoke Article 50 right away. It might take a couple of years," said Lowe. "This morning, Mark Carney from The Bank of England said there were funds in place to protect us and we need to keep the market as firm as possible, so businesses will continue doing what they're doing. My feelings are that we haven’t had companies say they’re not doing stuff, we are still getting lots of enquires, our company name says 'International' and we work with global partners who are still going to continue to do their business with us. As an industry we just need to confront this with positivity."
Working with countries outside the EU
"Perhaps in the long term, leaving might mean we have stronger trading relationships with countries outside of Europe, which may mean we can forge closer links with other emerging economies," said Robson. "On our own we might have better trading relationships with India, China, South America and the US, which could be a positive that comes out of us leaving; it has given us that opportunity."
Sterling drop could be attractive
In the short term at least, the value of the sterling has fallen sharply, meaning anyone coming to the UK will get better value for money. This may also make it more expensive for those going to US or EU as the weak pound will give them less for their money. This could mean that UK companies keep their events here, while others travel here while it's cheaper.
"Conversely, the UK may now be considered a more cost-effective option for inbound events, explains Newton."
Could Brexit mean the end for TOMS?
The UK's exit from the EU could impact on the Tour Operators Margin Scheme (TOMS), the compulsory and unpopular margin accounting scheme for businesses buying in and recharging the cost of travel services, which UK event agencies have argued puts them at a competitive disadvantage. FMI Group group director John Fisher said in a post-referendum blog: "There will be no appetite to pursue UK event organisers who do not currently allow for TOMS as they can see it won’t apply in a few years’ time. So we may very well be going back to the old days of not charging VAT on overseas events in Europe which will make overseas events cheaper to run for UK operators going forward?"
• For more breaking news and in-depth features, sign up to C&IT Magazine's daily Newstracker here