Travel industry growth to outpace world economy, says WTTC

By Ian Taylor | 24 March 2015 at 08.23 GMT
The travel industry will grow faster than the global economy this year, according to the latest World Travel and Tourism Council (WTTC) forecast.

The WTTC’s annual economic impact assessment predicts travel and tourism will grow by 3.7% worldwide this year against a global economic growth forecast of 2.9%.

The Council forecasts the sector’s total contribution to the world economy will reach $7,860 billion or 10% of global GDP, up by $280 billion on 2014, and travel will account for 9.5% of all jobs in the world “once all direct, indirect and induced impacts” are included.

The industry accounted for 277 million jobs worldwide last year, according to WTTC estimates.

WTTC president and chief executive David Scowsill (pictured) said: “Travel and tourism continues to grow faster than the global economy and is an enduring source of job creation and a driver of growth for every region in the world.”

He added: “The sector has recorded strong economic growth in 19 of the last 20 years, providing much-needed economic stability at a time of global economic volatility.

“Governments looking for a sector which can create jobs and drive economic growth should focus on travel and tourism.”

But Scowsill noted: “This industry requires the right regulatory environment in which to flourish, along with progressive policies on visa access, taxation, human resources planning, and sustainability.”

In an interview with Travel Weekly, Scowsill hit out at the UK government for failing to address these issues.

He said: “The UK is not a good example of managing the sector.”

The WTTC estimates the US and China as the two biggest travel and tourism economies in the world, with Germany now in third place, having overtaken Japan, and the UK in fifth.

The Council expects Russia to be the only G20 country to register a decline in travel and tourism growth this year, due to sanctions imposed by the US and European Union over the Ukraine.

The WTTC forecasts South Asia will see the highest travel and tourism growth in 2015 at 6.9% year on year, against growth in Europe of 2.4%.

However, Scowsill said: “The long-term prospects for our sector are very encouraging.

“Travel and tourism will continue to grow faster than the global economy and most other major industries.”

Sourced from Travel Weekly

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UK policy failures put travel growth at risk

By Ian Taylor | 24 March 2015 at 08.30 GMT
The World Travel and Tourism Council (WTTC) urged the UK government “not to lose focus” on travel and tourism after forecasting the sector would grow by 4% this year in Britain, outpacing growth in the economy as a whole.

The WTTC published its annual economic impact assessment today, predicting UK travel and tourism would raise its contribution to GDP by 4% this year against forecast economic growth of 2.9%.

The Council put UK jobs growth in travel and tourism at 2%.

The WTTC estimates the industry contributed almost £188 billion to UK GDP in 2014 and accounted for 4.2 million jobs when “indirect and induced impacts” are included alongside the direct impact on the economy.

But the GDP contribution could increase to £195 billion by the end of 2015 or “almost 11% of UK GDP and 13% of total employment”.

However, WTTC president and chief executive David Scowsill warned Britain could lose its position as the world’s fifth-largest travel and tourism economy without government action.

He urged the next government “to take three major steps” to ensure the sector continues to grow.

Scowsill said: “First, there is a need to make visa applications easier, particularly for high-spending Chinese travellers.

“Second, the Air Passenger Duty (APD) tax, which remains among the highest in the world, must be reformed.

“Third, a decision must be taken quickly on addressing the chronic under-supply of airport capacity in the South East.”

The WTTC further warned the UK sector could employ 352,000 fewer people and contribute £17 billion less in GDP over the next 10 years if the government and industry fail to implement policies to recruit and manage talent.

WTTC research suggests the UK’s travel and tourism sector faces a major human-resource challenge and severe skills shortage by 2024.

Scowsill said: “Travel and tourism has the potential to contribute five million jobs to the British economy by 2025.

“However, this growth will not happen by itself. It needs progressive and coordinated government policies across the sector.”

The WTTC report Global Talent Trends and Issues for the Travel and Tourism Sector can be found here: http://www.wttc.org/research/policy-research/human-capital/global-talent-trends/

Sourced from Travel Weekly


Flybe’s new route investment at Cardiff Airport is a good deal for now, but what about the future?

10:34, 19 March 2015
OPINION BY MARTINEVANS
Aviation expert Martin Evans explores Flybe’s investment in new routes at Cardiff Airport but asks what will happen over the long-term

In the airport business it helps to have a short memory.

There are a limited number of airlines to do deals with so if one airline stabs you in the back, the next morning you offer to sharpen the blades for them.

So it was no great surprise when Flybe announced a triumphant expansion at Cardiff Airport thirteen months after abandoning some of the airport’s most important routes at very short notice.

The routes
This was a deal that both parties really needed but of the ‘eleven’ new routes, how much is really new?

Well, two routes, Belfast and Jersey were already being flown by flybe.

Dusseldorf had already been announced as a replacement for Germanwings.

Edinburgh, Glasgow and Paris Charles de Gaulle abandoned by Flybe a year ago, with Edinburgh and Paris Orly already served by City Jet leaving Cork, Dublin, Milan, Faro and Munich as the new routes but of these Dublin is already served by Aer Lingus.
The deal
Route network isn’t the only positive from this deal. Flybe has signed a ten year agreement with Cardiff Airport to base two aircraft at Cardiff.

Having based aircraft is very important, it brings jobs, it brings more convenient arrival and departure times and it helps the marketing of routes. It shows a commitment to the airport and more aircraft can be added later for future growth.

This was a deal that had to be done by Cardiff Airport.

Challenges
The opportunity to become a base for a low cost airline now seems to have vanished.

The weakness at Cardiff is not only having a very strong summer market but a very weak Winter market but also competition from Bristol Airport where the UK’s two biggest low cost airlines have bases.

This is unfortunate because the smmer market at Cardiff is better suited to a low cost airline.

However, the traditional Spanish market is well served by low cost airline Vuelling who, by not having aircraft based at Cardiff, can offer more seats in summer than in winter.

The lack of a based low cost airline makes Cardiff an ideal base for Flybe. They don’t want to compete directly with the low cost airlines who use larger aircraft and have lower costs of operation.

Their business model is to use smaller aircraft offering high frequency services between major cities or routes that are too small for the low cost airlines.

An airport that doesn’t have a based low cost airline needs connections to major UK and European cities and as Europe’s largest regional airline, flybe is the best option available.

Related story: Chief executive of Flybe on the Cardiff investment.

Financial rationale
Flybe also had reasons to need this deal. Flybe has been undergoing a restructuring to take costs out of the business. As part of the restructuring they have grounded a complete fleet of 14 aircraft, the Embraer E195.

These aircraft are too large for high frequency services in the UK market but too small to compete with low cost airlines on leisure routes.

It is unusual strategy for an airline to ground a fleet if there isn’t a definite disposal plan, if the aircraft can cover their operating costs any contribution towards the lease costs would be better than nothing.

Even though the aircraft are grounded, the lease costs still have to be paid.

It was sensible of Flybe to grab the opportunity of earning some revenue with them at Cardiff.

However, we will have an airline at Cardiff operating two aircraft that it doesn’t want to operate any more because it is the wrong aircraft for the UK market.

The problem then becomes one of how is the airline going to grow the business at Cardiff over the ten years of the agreement?

Five of the E195 fleet have already been disposed of and if flybe see an opportunity to dispose of the rest of the fleet will they still retain two of the aircraft for Cardiff or take the more sensible option of disposing of all of them?

Will they extend the lease on these aircraft in 5 years time or will they be returned? What if there can be further expansion of the Cardiff base, will another aircraft type be operated?

Future options
What is probable is that in the second half of this agreement we will see smaller aircraft being operated, probably turboprops.

Clearly the deal works for both parties in the short term, Cardiff gets more routes and passengers, flybe earns revenue from two unwanted aircraft.

However, we should expect the route network to evolve over the next ten years to one that uses smaller aircraft flying more frequently.

That would be not be a bad outcome for the business traveller but it would be one that doesn’t serve the leisure market that Cardiff is currently so dependent on.

If Flybe doesn’t develop a profitable business at Cardiff Airport over the first few years of this agreement with a strategy that fits in with the rest of the UK business then we can expect the knives will be kept polished for future use.

Sourced from walesonline


Chancellor says nothing on APD or travel in final Budget

18 March 2015 at 14.15 GMT
Chancellor George Osborne made no mention of Air Passenger Duty in today’s Budget, but Treasury Budget documents confirm APD will rise at the rate of the Retail Price Index (RPI) from April next year.

Changes to APD from this spring, already announced, will see the overall tax take from the duty fall by about £250 million in the next financial year.

But the Treasury still expects to extract £3.9 billion in annual duty from the tax by 2018-19, up from £3.2 billion in the current year.

APD will be charged at two rates rather than four from the start of April, with a short-haul economy rate of £13 and £71 for medium and long-haul flights.

Fares for children under 14 will no longer be subject to APD from May.

The Chancellor made few direct references to travel in his final Budget before the general election on May 7.

However, his pledge to “ensure Britain is the global centre for the sharing economy” could have repercussions for sections of the travel industry.

Budget documents state the Government’s intention to “enable government employees to use sharing economy solutions to book accommodation and transport when travelling on official business”.

Osborne promised “new investment in transport infrastructure for London”, “a comprehensive transport strategy for the North” and “over £7 billion of transport investment” for the South West.

A cut in corporation tax to 20% and review of business rates were calculated to please businesses.

The Chancellor appealed to households by announcing a freeze on fuel duty, a reduction in beer duty and a rise in the personal tax allowance.

Osborne announced a so-called Google Tax on companies seeking to avoid taxes by registering overseas would be introduced next week and apply from next month.

Raising APD by the RPI rate is likely to mean an above-inflation rise next year.

RPI has been consistently higher than the official Consumer Price Index (CPI) since 2009 and the former rate is no longer used by the Government as an official measure of inflation.

The annual RPI rate in January of this year was 0.5% against a CPI rate of 0.3%.

Sourced from Travel Weekly


Ryanair sets out plans for new long-haul routes

By Phil Davies | 17 March 2015 at 08.19 GMT

Ryanair is talking to manufacturers about acquiring long-haul aircraft as it plans to develop low fare transatlantic services.

The airline said it would like to offer flights between 10 European cities and a similar number of US destinations.

But it would be four to five years before services would start, according to the Irish low-cost carrier, confirming plans reported by Travel Weekly earlier this month.

The venture’s planned European bases would include Stansted, Dublin, Cologne and Berlin, plus others in Spain, Italy and Scandinavia.

Flights would connect between 12 and 14 European cities with US destinations including Boston, Chicago, Miami, New York and Washington.

Although some subsidised promotional fares would cost £10, other one-way tickets would be priced at £99 or more, and the airline would fill up to half its aircraft with more expensive premium seats, head of marketing Kenny Jacobs was reported as saying.

Ryanair said: “The board of Ryanair, like any plc, has approved the business plans for future growth, including transatlantic.

“We are talking to manufacturers about long-haul aircraft but cannot comment further on this.

“European consumers want lower-cost travel to the USA and the same for Americans coming to Europe. We see it as a logical development in the European market.”

Noting Scandinavian budget carrier Norwegian’s transatlantic services, Jacobs told the Financial Times: “We’ve seen what others have done, we’ve listened and observed what’s gone on in the past 12 months and now have a better view on how we’d like to launch it and market it, and what the product would look like.”

Ryanair’s service, pitched as part of an ambitious growth strategy over the next five years, would be different from that of Norwegian because “we’re a bigger business — a bigger brand with more traffic and a much more efficient cost model,” Jacobs said.

The transatlantic flights would not be branded under the company name, he added.

Confirmation of the long haul plans came as the carrier released its winter flying programme three months earlier than last year, covering more than 1,600 routes.

Jacobs said: “Ryanair is pleased to launch our biggest ever winter schedule, with more flights, routes and destinations, as we continue to grow Europe’s biggest route network.

“Ryanair will continue to connect Europe’s key centres of business, with more flights and improved schedules to and from major cities, including Berlin, Edinburgh, London, Madrid, Milan, Rome and Warsaw.”

Sourced from Travel Weekly


UK visitor attractions demand political recognition of tourism

By Phil Davies | 16 March 2015 at 08.31 GMT

 

The head of the Association of Leading Visitor Attractions today called on politicians to recognise the importance of tourism in their election manifestos.

Director Bernard Donoghue made his plea as the association revealed that more than 123 million visitors passed through the doors of top UK museums, galleries and other attractions in 2014, a record 6.5% rise on the previous year.

Scottish attractions had the greatest increase of almost 10% increase, followed by London with a rise of 7.11%.

First World War centenary commemorations, including the sea of poppies at the Tower of London, and the Matisse exhibition at the Tate Modern in London helped boost numbers.

The Commonwealth Games in Glasgow also helped, according to new statistics from the 57-member association.

The British Museum remained the most popular visitor attraction overall for the eighth year running with 6.7 million visitors followed by the National Gallery, which saw a 6.4% increase to 6.4 million.

Donoghue said: “I am delighted that our members figures are going from strength to strength – reflecting the significant role they play in the economy.

“As we approach the general election we want to remind all political parties that no party mentioned tourism in their last general election manifesto, however these figures clearly demonstrate the popularity of our best loved attractions and the importance of tourism to the UK – it’s the fifth biggest industry and the thidrd largest employer, generating £127 billion per year.

“I look forward to seeing all political parties spell out their strong support and ambitions for tourism, heritage, and arts and culture in their forthcoming manifestos.”

He said he was confident that figures will rise again this year with an anticipated increase in overseas visitors.

“Our members continue to develop and push the boundaries with more ground-breaking and innovative exhibitions, which will attract record numbers such as Alexander McQueen: Savage Beauty at the V&A from March 14, to Audrey Hepburn: Portraits of an Icon at the National Portrait Gallery, which opens on July 2.

Outside London, Chester Zoo will be opening “Islands” in June which will be the biggest new Zoo development in Europe by recreating the amazing tropical environments of six South East Asian islands,” he said.

There were 119 million visitors to ALVA properties in 2013, 92 million in 2012 and 97 million in 2011.

Sourced from Travel Weekly


Glasgow airport reports busiest February in eight years

By Phil Davies | 11 March 2015 at 13.07 GMT
Continued demand for eastern European destinations served by Wizz Air and Ryanair helped push passengers using Glasgow airport up by almost 14% last month.

The Scottish airport handled more than 510,000 passengers in February – its 24th consecutive month of growth.

International traffic was up by almost a quarter over February last year while domestic numbers grew by 6.9% with British Airways, Flybe and Loganair all reporting a strong February.

Ryanair’s three daily services to Stansted also continued to perform well, according to the airport.

Aer Lingus launched flights to Donegal last month and Citywing confirmed an increase in services to the Isle of Man to 11 a week during the summer. Flybe launches a new double daily service to Bournemouth on March 29 and flights to Cardiff in June.

Airport managing director, Amanda McMillan, said: “Our success in securing new routes and attracting airlines to Glasgow has translated into sustained passenger growth and we could not have asked for a better start to the year.

“The next three months will see the launch of a further 13 new routes including direct flights to Las Vegas, Munich, Prague and Halifax, Nova Scotia.

“We are continuing to make improvements to the airport in order to accommodate this growth and are making excellent progress with the £3 million extension of our east pier.

“It is an exciting time for Glasgow airport and there is much to look forward to with major events such as the World Gymnastics and IPC Swimming World Championships still to come.”

Sourced from Travel Weekly