How NYC Tourism Could Be Affected by Brexit Decision

The Brexit could hurt British tourism to New York in the short term, but the split may not be all bad for the city, observers say.

Markets were roiled Friday with the British pound dropping to a historic low after voters in the United Kingdom decided to exit the European Union. In the aftermath of the decision, the pound fell to a 31-year low, The Associated Press reported. The euro also fell, making travel to the United States from the U.K. and Europe more expensive.

Sharr Prohaska, a clinical associate professor in New York University's Tisch Center for Hospitality and Tourism, said the decision will likely have a large effect on British tourism to the city.

"Due to the immediate decrease in the value of the pound, people are going to reassess how their money is spent," Prohaska said. "A visit to the U.S. with the strong U.S. dollar will not be as attractive as it has been in the past."

On the other hand, such shifting currency changes make travel from the U.S. to the UK and Europe cheaper, as the dollar will go farther against a weaker pound and euro. While European currency fell, the U.S. dollar rose by more than 3 percent Friday, the biggest gain in one day since 1978, NBC News reported.

According to NYC & Company, New York City's official marketing organization, the city had nearly 1.2 million visitors from the U.K. last year, making the country one of its largest overseas markets. In 2014, spending per overseas visitor to the U.S. was $4,382, according to the U.S. Travel Association.

A spokesperson for NYC & Company said it is too soon to predict how Brexit may affect New York tourism, given that many trips are planned months in advance.

But Jonathan Grella, the U.S. Travel Association's executive vice president for public affairs, said there is a lot of speculation about the impact on inbound tourism since travel tends to depend on world events.

"It's this shockwave effect where some incidents or events somewhere can have a major impact everywhere," he said. "That's the business we're in but we're monitoring it right now."

British tourist Tina Angus said she though the pound's instability is temporary when she was asked Friday on Fifth Avenue about its effect on British travel to the U.S. 

"I think once the dust settles we will be fine. Our lives will be the same," she said. "We are a big country, we put a lot of money in the E.U. and didn't get a lot of money out, so maybe now we can look after our own instead of everybody else." 

New York City might find that the Brexit might not have all negative consequences. The city's real estate market is one possible silver lining.

"New York has always been a global city, and this will only become more true as wealthy foreign buyers who may have considered London are put off by this isolationist turn," said Krishna Rao, an economist with New York City real estate marketplace StreetEasy.

Morris Davis, the Academic Director of the Center for Real Estate at Rutgers Business School, said he predicts the decision will benefit the city overall and bring in additional business activity beyond real estate sales.

"The bottom line is incomes in New York are probably going to go up," Davis said. "The city will probably benefit from Brexit. I think property prices in New York are going to go up, if that's even possible."

He said the economic insecurity in London might lead to an increase in the number of people who want to work in New York, as people in the British finance sector may decide to move elsewhere. The decision to leave the European Union has made the U.K.'s economic future extremely uncertain, which could push global companies and thousands of businesses to abandon their London headquarters for other cities. The precarious economy in the U.K. may also deter companies from making new investments in the country.

Despite the potential for economic benefits in New York, Davis said the tumultuous markets in Europe could put the global economy at risk of recession.

"The EU might dissolve," Davis said, alluding to fears that other European nations may hold their own national referendums on membership. Following the Brexit announcement Friday, France's National Front Leader Marine Le Pen and Dutch anti-immigration politician Geert Wilders called for EU votes in their respective countries, the BBC reported.

"It's not good for the EU and the EU is a trading partner and typically you want your trading partners to be healthy," he said of a possible breakup.