THE BREXIT SKI CLIFF EDGE?
1st September 2017 | Jane Peel, Chief Reporter
Last modified on May 14th, 2020
A year ago the snowsports industry was coming to terms with the UK’s vote to leave the EU. 12-months on PlanetSKI looks at the Brexit effect.
The first winter after the Brexit vote has come and gone.
Another is almost here.
In one sense, nothing has changed.
Britain is still in the European Union.
But as last season was drawing to a close, Parliament voted to trigger Article 50, starting the exit process and setting the date for the divorce: 29th March 2019.
Negotiations between the British government and EU officials to agree terms have only just begun, and the concerns of the travel industry are not high on the agenda.
Those concerns aren’t going away.
Far from it.
A group of worried company bosses has got together to set up the Brexit Ski Group.
It met for the first time on 4th September to discuss the way forward.
See our separate article Brexit Brainstorm.
Brexit is a huge issue for the whole industry which is overwhelmingly opposed to it, though there are a few dissenting voices.
Here at PlanetSKI we’re going to be looking at how Brexit could affect ski holiday businesses, Britons who go to EU resorts for the winter season, and holidaymakers.
First it’s tour operators and chalet firms.
SKI HOLIDAY BUSINESSES
Free movement of labour
The UK government wants to impose restrictions on EU citizens’ right to work and move freely in the UK, which will very likely result in similar restrictions for UK nationals wishing to travel to EU countries.
Tour operators and chalet companies are especially concerned about how this will affect their ability to hire seasonal resort staff.
The Posted Workers Directive allows companies to hire staff – chalet hosts, resort reps etc – in the UK under UK employment law and send them abroad on a temporary basis.
Companies use it largely because it keeps costs down and eases the recruiting process.
Some in the snowsports business go as far as to suggest that an end to the free movement of labour and the posted workers’ directive could result not only in the end of the chalet holiday but the collapse of the ski industry itself, particularly in France where employment costs are the highest in Europe and 25 per cent of the foreign skiers currently come from the UK.
“Much of this British ski market is serviced by UK businesses,” says Karen Broom Smith, co-owner and operational director of the luxury chalet firm, Purple Ski which has properties in Méribel.
“Being seasonal, these businesses rely on the free movement of labour to facilitate easy and cost-effective hiring processes and so increase capacity quickly as demand in peak times ramps up.”
She says many – if not most – of the workers are “posted” seasonaires and there are significant financial benefits in hiring them in the UK.
For example, the burden of social security contributions in France is much higher – at 20 per cent for the employee and 45 per cent for the employer.
“Essentially, if UK based businesses had to employ people on French contracts, wage costs would at least double, perhaps even be up to four times what they are today.
“There is no way these costs can be absorbed.”
Andy Young, who owns Ice and Fire Ski and Snowboard Holidays, a chalet company with properties in La Plagne in France, agrees.
“Take it from the horse’s mouth …no freedom of movement and secondment equals MUCH more expensive ski holidays and a lot less choice.
“This summer alone has seen at least 10 small chalet companies pack up shop just in our valley.
“Anybody who thought that Brexit would not have a big impact on holidays in Europe are living in la-la land.”
Karen Broom Smith says there is some hope.
There is a pre-EU France-UK agreement dating back to 1956 which allows for short term secondments between the two countries, though there is still a worry that UK citizens may have to apply for visas or work permits to work in Europe.
She says some form of freedom of movement for workers is essential if the industry is to survive.
Predictions that economic catastrophe would immediately strike the UK after the Brexit vote proved wrong but the Pound has taken a dive.
It remains about 10 per cent down against the Euro and it’s hitting the industry hard.
Last season many travel firms were able to keep their prices down because they had pre-bought their currency before the fall in Sterling.
“The pound is so weak that all ski companies are going to be severely impacted,” Nick Williams, Director at the Mountain Heaven chalet company told PlanetSKI.
“This year we have bought at €1.08 to the Pound compared to our average last year of €1.25. That’s going to add very, very significant costs to our business.
“Since the Brexit vote we’ve had a 30 per cent increase in our costs. We’ve increased our prices by about 10 per cent. The problem is that leaves a 20 per cent gap.”
The company is looking at ways to cut its costs. It will not take on an operational manager this winter, and will be lobbying chalet owners for lower rents.
Ironically, bookings are up on this time last year, despite some customers querying the price rises.
And the company has some new chalets being built for this season and next, so it’s not all bad news.
The three on-piste en-suite chalets are being built to replace four less well-appointed ones that have been dropped from the programme.
Williams says Mountain Heaven will survive but he’s convinced that only the strongest ski companies will do so and that they may well have to change the way they do business.
“There is no more clarity than there was a year ago,” says Chris Thompson, Managing Director of the family focused firm, Ski Famille.
“We’re all sitting in limbo. If we had a framework – it doesn’t matter whether we like it or not – we could get on with it. It’s enormously frustrating.”
Thompson says he doesn’t know which of many ideas will prove workable for employing staff from the end of March 2019.
He suspects there will be some form of transitional arrangement.
It’s possible, he says, that the 1956 France-UK agreement mentioned above might allow easy movement of workers between the two countries but, he adds, “who knows”?
That’s the problem.
At this stage, no one knows and providing the travel sector with answers isn’t the government’s priority.
“Travel is seen as a luxury but it’s a luxury that employs tens of thousands of people and generates money for economy,” Chris Thompson says.
“It would be enormously upsetting if a whole sector were put at risk needlessly because we haven’t got an idea how it’s going to work.”
If we don’t know what’s going to happen, why fear the worst?
That’s the argument of the minority working in the industry who are either in favour of Brexit or at the least don’t violently oppose it.
Frank Atherton retired from his full-time job in 2004 and has worked every winter season since, both in EU countries and elsewhere, 11 of them for UK tour operators.
The Briton has a home in Spain and says he is “by no means anti European” but “I do not think the world will come to an end when the UK finally leaves the EU, as so many others seem to do”.
“UK citizens travelled abroad before we joined a trading bloc, took holidays and generally came and went without too much hassle,” he told PlanetSKI.
“As for how it will affect the ski tourism sector, I have no doubt that things may become more difficult in some respects, but the sector flourished before the EEC and there is no doubt it can after Brexit.
“The businesses will have to adapt. Look at what happened when Switzerland imposed its minimum wage rules. Yes lots of tour operators pulled out but there are still the stronger ones operating successfully there. Those that adapt will survive, those that don’t won’t.”
Few, however, would agree that the UK ski market was a flourishing one before the advent of the European Economic Community (which preceded the EU).
In those days, skiing was a pastime open only to the wealthy.
Some fear that’s how the future will pan out too.
Look out for our further reports shortly on the potential effect of Brexit on the snowsports industry. I’ll be looking at the impact on the seasonaires themselves and of course the rest of us – the skiers and snowboarders who take a holiday each winter.
For the Spirit of the Mountains – PlanetSKI: No1 for ski news