As news of the UK’s surprising vote to exit the European Union continues begins to settle in, Convene reached out to IAPCO, the International Association of Professional Congress Organisers, for its perspective. (Read MCI Group President Robin Lokerman’s thoughts on the Brexit here.) IAPCO Executive Director Sarah Storie-Pugh provided responses to our questions via email. “It is probably too soon to make any accurate predictions, and it is hoped that once the initial knee-jerk reactions have passed, there will be an early return to stability,” Storie-Pugh said. “And, of course, at the present time the decision to leave the EU is not yet legal, it is merely the wish of the British public. This wish will, of course, come to pass, but at the time and choosing of [UK Prime Minister David] Cameron as to when he officially wishes to confirm the withdrawal (estimated to be in October). This hopefully buys some time to allow the markets to stabilize before the two-year negotiation period commences.”
What does this mean for the international meetings and business events community?
There is likely to be a period of uncertainty that will hurt the international meetings market, but in the long run it is doubtful that there will be a huge impact on the business. Having said that, the attitude regarding the negotiations over the next two years [for the UK’s exit from the EU] will be crucial as to whether this will be a conciliatory or antagonistic dialogue. The progress of other bilateral agreements covering free business travel with all the important nations will also prove to be a relevant factor.
On the other hand, at least for the next few months, the UK will be a cheaper destination for foreign organizers, as the pound is likely to settle at least 5 percent lower than the other major currencies. A weaker pound might actually balance out any potential lost business due to possible uncertainty surrounding the new situation.
Do you think groups will reconsider meeting in the UK — short term and long term?
It is unlikely that, in the long term, meetings destined for the UK will be affected. Ultimately, meetings will go where it is best for their event, whether it be destination- or financially motivated, as long as there is no political instability or terrorist threat. Having said that, there are European associations that will only meet within the Euro Zone, and that will therefore negate the UK. In the short term, there might be some hesitancy until the political arena and the question of a possible breakup of the Union settles down one way or another.
What is the potential ripple effect for meetings in other EU countries?
Currently, a ripple effect is not envisaged; however, as stated above, much will depend on how the EU handles the Brexit negotiations. If other countries follow suit and have their own referendums, there could well be an impact long term until stability reestablishes itself.
There is, however, potential negative impact for expensive EU destinations such as Paris, Copenhagen, etc., as the UK becomes cheaper compared to other EU destinations. The UK was never part of the Schengen Agreement, therefore it is unlikely that there will be any big changes for business travelers.
There is the potential of a domino effect. Initially, countries such as Denmark and Finland, followed by France and the Netherlands, could start referendums. This would then cause greater uncertainty and financial instability until the outcome is known, and then ultimately the result of that outcome.
Were you surprised by the vote?
Yes and no. Nationalism (the right wing) is growing throughout Europe due to the refugee crisis, and this crisis played a major part in the public’s voting decision. There was a strong movement against the EU in parts of the country, but it was thought that ultimately voters would see the economic benefit and be reluctant to take the risk. On the other hand, there was an “it really couldn’t happen” belief throughout Europe, and the [voting] margin — larger than anticipated — caused some surprise and shock.