Chander Baljee, chairman and managing director of the Royal Orchid Hotels, writes exclusively for IndiaGBnews on the impact of Brexit. Royal Orchid Hotels is India’s fastest growing hotel chain and has been listed in the Bombay and National Stock Exchange since 2006 . The flagship hotel was established in Bangalore in 1973 by Mr Baljee. The Royal Orchid chain operates 28 hotels in 20 cities across India and Africa. Visit: www.royalorchidhotels.com
Since the exit of Britain from the EU, we have several triggers of negative impact across the globe like; the drop of the British Pound (11%); the 1000 points plummet in the Indian stock market; negotiations of trade on British goods and the impact of global travel to the U.K from India and vice versa. The concerns we face is that the Brexit Campaign has not structured the future course of action which has precisely led the uncertainty and triggered the financial markets across the world into array. But the net effect can turn out to be positive for India.
Firstly, business travelers and niche tourists (Pilgrimage, landmarks, family visits) will travel as usual, but we should expect that the mid-segment and back packers will not travel given the drop in value of the Pound. Hence destinations that see these segments using them will see a slowdown. However if by October the UK decides not to follow through on the Brexit referendum, the situation is expected to bounce back. We anticipate that online travel agents and full-service travel services will take steps to push for spot discounts and early bird offers for UK travelers swaying them to come to India and escape the British winter chills.
Over the years, the historic and cultural ties with the Britain have helped India to pave a gateway into neighboring countries like Ireland, Scotland and Wales creating bi-lateral ties on immigration, tours and culinary experiences. However, with the Brexit Campaign, countries like Scotland and Wales are taking strides to ride against this motion and still making attempts to stay with the EU. Additionally, global tour operators who offer trans-continental flights to India via London as a stopover may have to consider additional charges because of fluctuations in foreign exchange rates.
From an investment viewpoint, India is the second biggest source of FDI for the UK with Indian companies keen to set up their factories and offices in the UK, so that they can sell their products to the rest of Europe under the European free market system. However, if Britain exits the EU, it will not be as attractive a destination for Indian FDI. As a result the tourism industry is one of the prime sectors which could get hit drastically due to the change. However, Britain may try extra hard to woo Indian companies to invest by providing much bigger incentives in terms of tax breaks, slashed regulation and other financial incentives since the EU is known for their complex bureaucratic regulatory structure. And the silver lining, may find that Indian companies can expect a deregulated, freer market in Britain.
With Britain cutting off ties with the EU, Britain will still need a steady inflow of talented labour where India will fit perfectly due to its English-speaking population, thereby creating closely ties with Indian organizations and improve corporate travel for both countries. With migration from mainland Europe drying up, Britain would be able to accommodate migration from other countries, which will suit India’s interests.
With education being one of the leading factors post the Brexit campaign, it will drive more alliances with British universities to free up funds for students from other countries to win scholarships and create dual exchange programs between both nationalities and drive a more homogenous approach to tourism in the education space.