The 70% increase since January, according to analyst Steve Austin at Oil-Price.Net, is due to a fall in the amount of fracked oil in the US and the renewed threat of terrorism in the Middle East, among other issues. The good news is that the site’s forecast for the year is an average $54 a barrel, so this expected price stability will go some way to offset a fall in the exchange rate.

The other critical currency is the euro, which was introduced to financial markets in 1999 and as a common currency in 2002 (at €1.59 to the pound). At the start of the year, the pound hovered around the €1.3 mark, but has now fallen by almost 12% to about €1.18. As well as making costs more expensive in destination, accommodation in Europe will be bought in euros, so UK contractors are at an immediate disadvantage. The impact in resorts will be felt by UK travellers immediately, but with winter contracts already sealed, the real package price increases will not be felt until next summer when shifts in oil prices, euro and dollar exchange rates filter through.

So much for costs, but how bad will Brexit be for consumers’ spending power? Research firm Euromonitor’s forecast is not comforting reading. It predicts a 2% fall in UK gross domestic product (effectively the measure of a country’s wealth) until 2020, with the biggest impact felt next year.

Long-term effects

Caroline Bremner, who heads Euromonitor’s global research programme for travel, reminds us of what happened following the global recession in 2008. “It took eight years for UK outbound demand to recover to its original levels pre-crisis, only achieving levels of over 78 million outbound trips in 2015,” she says.

“In value sales terms, the outbound market collapsed and lost over £10 billion from its peak to trough in 2008 and bottomed out in 2013 when the outbound market started to pick up again thanks to pent-up demand and a stronger economy.”

It remains to be seen whether it gets as bad as 2008, but Bremner expects to see discounting of late summer 2016 sales and of winter 2016-17, and flexible payment opportunities. She added: “Next year is expected to be the crunch year for the full effects of Brexit.”

Following the referendum investors began to see travel as a bad punt. Thomas Cook’s share price fell from 73p on the day of the poll to 55p a week later, a 25% fall. Tui, which is more of a pan-European company, fared better, falling only 15%. Jitters also affected the airlines, with IAG, parent company of British Airways, Aer Lingus and Iberia, slumping 33% due to fears that a Brexit-trigger slump would affect business travel.

Air pressure

Once a new prime minister actually sets the Brexit ball rolling, apart from the effects on financial markets, a big question is what happens to the UK’s access to Europe’s airspace. At the moment, we are part of the Single Aviation Market, something that allowed Ryanair and easyJet to prosper. Brexit will technically deny us this, although the UK could become part of the European Common Aviation Area (ECAA), which includes non-EU members Iceland and Norway.

ECAA membership will mean continued acceptance by airlines of EU261, the passenger rights’ legislation, but ultimately, any admission to the ECAA will be dependent on the UK accepting some form of freedom of movement of citizens.

Meanwhile, a by-product of the Brexit vote has been to delay the decision on airport expansion in the south-east. It is now 12 months since the Davies Commission gave its support for a third Heathrow runway, but David Cameron did not sign it off. His successor, Theresa May, has in the past met with airport bosses to complain that her Maidenhead constituency was affected by noise.

In the short term at least there will be uplift in inbound tourism attracted by the cheaper pound. Britain currently ranks 140th of 141 most price-competitive destinations, according to the World Economic Forum, and the message that the UK will only get cheaper is already getting around, some claim.

Incoming queries

Rob Payne, chief executive of Best Western Hotels & Resorts Great Britain, which represents 260 independent UK hotels, has seen a spike of interest from China and the US following the referendum. It hasn’t all gone his way, however. “Anything that means the pound getting weaker means we see the bookings coming from abroad, but as a global business, we spend a lot of dollars as we pay fees to the US,” he said. “Those have increased, but we have hedged.”

Hoteliers are also fearful of a possible recession, he adds. “We have 4,100 properties around the world and we have seen an increase in people wanting to be members – they are trying to find shelter in a large organisation because they are worried about the impact of Brexit.”

There is a lot more to come in the next two years. The man who prompted all this, former Ukip leader Nigel Farage, is unapologetic and has reasons to smile. His €98,000 MEP salary, worth £75,000 on the day of the referendum, now equates to £84,000. Given this and all the uncertainty created for travel since the referendum, some might say he’s having the last laugh.