There is a very real chance that the UK will leave the EU following the referendum on 23 June.
That was the very clear message from economist Roger Bootle, chairman of Capital Economics, speaking at the International Hotel Investment Forum (IHIF) in Berlin this week. However, he was not so decisive about whether the UK will be better off leaving or remaining in Europe.
"Some economists believe the UK could lose up to 12% of GDP if we leave, others say we could gain 12% of GDP by staying," he told delegates at the InterContinental hotel. "The honest economists amongst us don't know what the consequences of leaving the UK will be."
Bootle highlighted that some of the gains of Brexit included savings in EU contributions, less regulation, the ability to strike new trade deals, a new skills-based migration policy and a boost to confidence and investment. On the other hand, the losses to the UK could be possible tariffs on export to the EU, loss of access to the single market, damage to the City, lower population growth and a drop in foreign direct investment.
"I don't think it will be a disaster if we leave. Some say that it will be a major blow to the City if we pull out of the EU with a number of major banks closing down their London operations and moving their headquarters to Paris or Frankfurt. This would obviously have a major impact on hotels and employment in the capital, but the idea that this is going to actually happen is frankly bonkers.
"If we do leave, there would be a two-year period of negotiations when there could be considerable uncertainty. But I believe a good trade deal will be struck as there will be a strong incentive to reach an agreement on both sides.
"The real big issue of Britain leaving will be the consequences for the future of the EU. It will be a time of continued worry about the eurozone and migration. The EU could unravel," he warned.
A survey published during IHIF by law firm Berwin Leighton Paisner showed that 54% of hotel industry professionals believe that Brexit is likely to adversely impact revpar and mergers and acquisitions activities in the UK.