ORLANDO – Here in Orlando’s popular tourist corridor, Britain’s Brexit vote probably seemed like a faraway concern that won’t matter much locally, or as an issue for Europeans alone.
But Britain’s decision to exit its membership in the European Union – which U.K. voters approved on Thursday in a referendum that passed by a 52-48 percent margin – most definitely will have a local impact in the Orlando area, and not necessarily for the region’s benefit, a noted economics forecaster said.
Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida, noted that the Orlando area benefits heavily from British tourism and from the investments by British business owners in the local economy.
“Britain now is the second largest country as far as the origins of international visits to Florida, Canada being number 1,” Snaith said. “Anything that affects that source of economic activity — whether it’s in real estate or leisure and hospitality — will be felt in the region.”
There could be a quick, negative impact on Central Florida’s tourism economy, Snaith said, if, as expected, the Brexit vote weakens the value of the British pound.
That could translate into a far more expensive trip to the Orlando area, he said, potentially hurting the local tourism industry.
“It will depend on what happens in the wake of this in the U.K. economy, and the value of the pound,” Snaith said. “I think if Britain exits (the European Union), the impact will be in foreign exchange markets, and we’ll see a decline in the pound versus the U.S. dollar.
“And that immediately makes hotels and rooms and meals more expensive to British tourism,” Snaith added. “There is that potential impact that would affect Florida directly from the vote itself. That would be the short run potential impact.”
Tim Boon, the president of the British American Chamber of Commerce in Orlando, and an area Realtor, noted that the British pound dropped overnight by 11 percent after the Brexit vote numbers became final.
“I was voting to remain and woke up this morning quite shocked that we’ve chosen to leave,” he said. “It was concerning, watching the pound drop. But I really hope that people realize they’ve got two years to come up with a divorce plan for leaving the EU.”
In the meantime, the weakening of the pound would definitely impact British tourism in the Orlando area, and home buying as well, he said.
“I think ultimately with the exchange rate dropping, that will impact the people coming here for vacations,” he said. “I think it could impact some property sales, but it also helps the Brits here who are selling because they will get a better exchange rate going back. From the perspective of Central Florida’s economy, although the Brits do invest here, there are a lot of other countries that do as well.”
Wendy Farrell was born and raised in Britain, and came to Central Florida on an E2 Visa to start a business, Signature Promotions, in Poinciana. She noted that there are a lot of E2 visa holders from Britain who run businesses in Central Florida, and the Brexit vote will definitely impact them.
“You have a lot of the E2 visa holders here, and a lot of them took early retirement from other things, and a lot of their income comes from investment pensions in the U.K., and that is dropping through the floor for them,” she said. “Those that rely on it on a regular basis are going to see that cut by a substantial basis” as the British pound declines against the dollar.
Farrell also noted that schools in Britain just started closing for the summer months, meaning the vacation season is about to start. The Brexit vote is likely to have an impact on where they go, she added.
“Vacation time over there is only just starting, and going anywhere in Europe is going to be a major expense because of the pounds,” Farrell said. “It’s not looking good. I have some friends here who run businesses. They’ve translated from pounds to U.S. dollars, and all of a sudden they will be getting so much less — and they have less to spend.”
Justine Assal also came to the Orlando area from Britain, and she runs ORB International, which organizes the annual BritWeek celebrations in Orlando. She also expects a drop in the pound that will hurt some aspects of British tourism in Central Florida.
Assal compared it to a drop in the Brazilian Real foreign exchange rates to the U.S. dollar, and how that has meant fewer Brazilians vacationing and shopping in the area.
“Does it make it more expensive for Brits to come here? Of course,” Assal said. “We’ve seen that with Brazil. Our malls are no longer filled with Brazilians because their real (currency) doesn’t go as far. It’s going to pull out a certain segment of that money from the local economy.
“I’ll again make a parallel with Brazil,” she added. “It doesn’t mean the Brazilians are not buying here anymore, it’s just that you’ve taken the 20-30 percent lower end of the market out. The same thing is going to happen to the U.K. A lot of the people that were squeezing it together, will for now probably not qualify.”
Farrell said she was frustrated by the narrow margin of the vote, indicating a deeply divided nation.
“I couldn’t go to bed last night, I was watching it, and I didn’t think it would have been as close as it was,” she said. “All it’s done is really kind of cut the U.K. in half. You’ve just got people against people now. It would have been so much better if it was a landslide either way. Then you know it’s the right decision. Forty-three years is a long time to be part of something, and then in a day decide not to be a part of it. Nobody knows what the consequences will be.”
Snaith said it will take a while to fully understand all the ramifications – local and international — of the Brexit vote.
“What it means for the feasibility and sustainability of the European Union as a whole, that is something that will continue to play out,” he said.
Michael Freeman is an Orlando journalist, playwright and author of the book “Bloody Rabbit”. Contact him at Freelineorlando@gmail.com..