The cost of a 4-person holiday to Europe this summer could rise by £230 following a vote to leave the EU, Treasury analysis shows.
- weaker pound to hit family holidays
- Treasury analysis shows £230 rise for a 4 person holiday to the EU
- costs could rise this summer after a leave vote
- cuts to mobile phone roaming charges not guaranteed
24 May 2016 - The cost of a 4-person holiday to Europe this summer could rise by £230 following a vote to leave the European Union.
The Treasury’s analysis of the immediate impact of a vote to leave, published on Monday, estimates the value of the pound will fall by 12%, making travel in Europe and the rest of the world more expensive.
With the pound expected to fall dramatically immediately after a vote to leave, travel costs such as accommodation, food and drinks would be higher for families travelling overseas.
New Treasury analysis shows that on average, after 2 years, a 4-person holiday travelling together would spend £230 more during an 8-night holiday in Europe.
The fall in the value of the pound would therefore affect all holiday expenditure abroad that is paid for after a vote to leave the EU on 23 June.
A vote to leave would also affect the cost of holidays to popular destinations outside the EU, such as Florida, with sterling expected to depreciate against other currencies including the US dollar.
Prime Minister David Cameron said:
"All the evidence points to the value of the pound falling after a vote to leave the EU. A weaker pound means people’s hard-earned savings won’t go as far on holidays overseas.
"The choice facing the British people on 23 June is increasingly clear: the certainty and economic security of remaining in the EU, or a leap in the dark that would raise prices – including the cost of a family holiday."
On top of the immediate effects of a weaker pound on the real-world cost of goods and services for those travelling abroad, there could also be a impacts on other arrangements that have benefitted British holidaymakers if the UK were to leave the EU.
Cost of travel
Cheap flights within the European Union could also be jeopardised if the UK leaves the EU’s single market.
Low cost air fares fell by more than 40% between 1992 and 2000, following the introduction of a single market for aviation which allows any EU airline to operate routes from and between any EU airport.
Outside the single market, the UK would lose this benefit which has increased competition and driven down costs for passengers.
Carolyn McCall, Chief Executive of easyJet said:
"For easyJet and our passengers membership of the EU has been a good thing. The common aviation area created by the EU allows any European airline to fly anywhere in Europe. This has kept all airlines’ costs low and has enabled low fares airlines like easyJet to expand.
"If the UK were to vote to leave the EU any new, more restrictive aviation arrangements would add cost and therefore fares would rise. And a weaker pound would mean the cost of a holiday abroad – including food, accommodation and drinks – would be more expensive."
That is why we think our customers are better off in Europe.
The cost of mobile phone roaming charges has already been cut to nearly zero in Europe, with the UK leadership securing a better deal for consumers.
The maximum surcharge for outgoing calls is now no more than €0.05 (about 4p) per minute, incoming calls are no more than €0.014 (less than a penny) per minute, texts are priced €0.02 per message (about a penny) and data is priced €0.05 per megabyte (about 4p).
From June 2017 all roaming charges across the EU will be completely abolished, after the UK led the charge in securing agreement across Europe as part of the single market in telecoms.
These arrangements, which benefit millions of British travellers every year, would not be guaranteed to continue were the UK to leave the European Union.
Gavin Patterson, chief executive of BT Group, which owns EE, said:
"Because of the UK’s membership of the EU, BT and EE have been able to offer our customers lower charges, including inclusive roaming plans and data charges that are over 90% lower for Britons travelling on the continent.?
"Voters need to think very carefully before turning their backs on an institution that helps to ensure benefits like that are delivered.?
"Membership of the EU also helps BT’s international division sell services to business customers and large organisations across Europe, something which helps us to create jobs."
Vittorio Colao, chief executive of the Vodafone Group, said:
"The end of roaming charges – which was driven by the EU – and Europe-wide offers from operators like Vodafone – the European leader in 4G – mean that everyone can use their mobiles anywhere in Europe without having to worry about excessive costs.
"Britain will benefit from being part of a borderless European single digital market as it will create new opportunities for economic growth. Consequently, we believe it is better to be a shaper and leader from within, rather than being just a commercial neighbour."
Other benefits enjoyed by holidaymakers travelling to Europe would also be at risk, including free healthcare within the EU and the ‘booze cruise’ enjoyed by thousands of day trippers every year, with customs controls likely to limit duty free.
Notes to editors
The analysis conducted by the Treasury uses data on the average spend per holiday visit of a UK resident published by the Office for National Statistics in the International Passenger Survey.
The Treasury’s analysis of the immediate economic impact of leaving the EU estimated a decline in the value of sterling of around 12% in the 2 years following a vote to leave. A range of other economic forecasters have projected a decline in the value of sterling in the event of a vote to leave the EU.
Treasury estimates of impact on the cost of a holiday to the most popular holiday destinations for UK travellers based on a 12% decline in the value of sterling
Numbers rounded to nearest £5:
- EU average, 8 night stay for 4 people, cost up £230
- Spain, 9 night stay for 4 people, up £225
- France, 8 night stay for 4 people, up £210
- USA, 14 night stay for 4 people, up £620
- Portugal, 10 night stay for 4 people, up £325
Source: Gov.uk (Contains public sector information licensed under the Open Government Licence v3.0.)