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Brexit – How would it affect the timeshare consumer?

Apr 15, 2016

To Leave or Remain?

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This summer UK citizens will be voting whether to Leave or Remain with the European Union

The 23rd June 2016 has potential to be an historic day for the UK. For it is the day UK residents head to the polls in what will be just the third-ever UK referendum, to vote upon the countries membership to the European Union.

The arguments from the Remain Campaign include: continued full access to the EU Single Market, inward investment and increased employment within the European Union. There are calls from the Leave Campaign for a Brexit however: to save the annual membership fee to the EU; which Britain contributed £13bn towards last year, reduce immigration, implement tighter border controls and more freedom to negotiate trade agreements with countries outside of the EU.

The result of the referendum will influence the lives of all UK citizens; however, in this article we’re going to focus on some of the issues that are likely to affect both timeshare owners and travellers. We posited questions to timeshare industry leaders and uncovered many areas that may be affected by a British exit from the European Union. Here we explore: Currency exchange, Health Care, Passenger Rights and Freedom of Movement amongst numerous consumer issues.

Currency Exchange

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Currency fluctuations could impact upon timeshare owners annual management fees

Holidays purchased in the UK to EU countries accounted for 29.3 million visits in 2014 and over 1/3 of these were made to Spain alone! For timeshare members who own in European countries such as Spain, annual management fees are generally invoiced in Euro’s, so any significant currency fluctuations are likely to have great impact upon these consumers.

Most annual management fees were invoiced in November 2015, since then, the value of Sterling has fallen 14% from 1.43 to 1.25 against the Euro. If things stayed like this, come November 2016, UK timeshare owners being invoiced in Euros could expect an apparent increase in their annual fees. To put this into perspective, 14% translates into an additional £70 on annual management fees of £500.

Mark Carney, Governor of the Bank of England, assures voters that the BofE is able to provide long-term financial stability to the UK, regardless of the outcome of the Brexit referendum. However, precautions were aired from Mr Carney regarding Britain’s economy in the short-term, suggesting a Brexit could “bring some challenges to financial stability”.

Since its creation in 1999 the Euro has fluctuated continuously, therefore, Britain exiting the Eurozone may not be as disastrous as first predicted. If the UK were to leave, the impact would ultimately be determined by any deals that can be forged between the UK Government and the European Union.

EU Timeshare Directive

Inconsistencies between the UK and the European Union regarding timeshare regulations could provide disincentives for UK consumers to purchase timeshare resorts outside of the UK. Currently, consumers are protected by the EU timeshare directive (2008/122/EC) which benefits UK citizens considering purchasing timeshare in the European Union as well as organisations owning, managing or selling timeshare. However, if the UK were to leave the EU timeshare owners may be exempt from the EU timeshare directive, unless the Prime Minister can secure assurances from the European Union for UK timeshare owners.

Health Care

The European Health Insurance Card (EHIC) is available to all EU residents and guarantees health care services whilst a tourist is on holiday in an EU and EEA country. The E111 card provides many timeshare owners, particularly those aged over 60, access to free or reduced-cost health care services provided by the state. Treatment includes medical care for pre-existing conditions which need to be monitored as well as chronic conditions which worsen whilst on holiday.

A potential Brexit could spell the end for the EHIC scheme which would remove the free healthcare option for travellers leading to cost implications for European travel, subject to negotiations between the UK Government and the European Union.

Passenger Rights and Airfares

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Brexit could lead to changes in legislation affecting passenger rights and regulations

EU regulations have opened up the skies to more flights and destinations, however, a Brexit may lead to new air service agreements having to be drafted which may reduce competition and increase airfares.

“One of the great things that most people in the UK will have benefited from is deregulation. Europe is the one [thing] that has delivered low fare air travel and cheaper holidays for British citizens,” (Michael O’Leary, 2016)

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Michael O’Leary praises the deregulation and low air fare travel afforded by EU membership

Currently, if a flight departing from an EU airport or arriving in the Eurozone with an EU carrier is delayed within the control of the airline, passengers are eligible for financial compensation. In the event of a Brexit, passenger rights and regulations would be removed from UK Statute Law unless the UK Government took steps to replicate them for UK travellers. It is worth noting that UK consumers are generally well aware of this legislation and that calls would be made from consumer groups to introduce comparable laws.

“Having a European Union – there are so many benefits and I just hope sense will prevail when it comes to having the vote on it.” (Richard Branson, 2016)

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Richard Branson is grateful for the benefits EU membership has granted UK travellers

Miscellaneous Consumer Issues

Consumer Rights Directive

The Consumers Rights Act 2015 defends many consumers protections in the EU including: clear pricing rules, requirements for information and a 14 day cooling off period (right to withdrawal) for purchases of goods and services. A Brexit may cause these protections to change depending upon any deals that can be forged between the UK Government and the European Union.

Roaming Fees

A recent cap on mobile phone roaming charges from the EU made it more affordable for consumers to use their mobiles whilst abroad in other EU countries. A plan to completely ban additional roaming fees has been proposed for April 2017, however, a Brexit may exempt British citizens from these regulations, unless the UK Government were able to implement them into UK Statute Law.

Cleaner Beaches

The EU Directive to improve beaches and sea quality to EU standards has had a noticeable difference in many of the UK traveller’s favourite beaches.

Freedom of Movement

Currently, UK consumers and workers are able to travel freely within most of Europe. EU citizens only have to adhere to rudimentary checks upon entry to the UK from border control and vice versa for UK travellers across EU countries. Changes in travel regulations as a result of a Brexit will depend upon any settlement agreed upon after the exit; however, for UK consumers travelling outside of the EU, the UK can still seek new bilateral visa agreements with non-EU countries.

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