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.”
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.”
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%.
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.
By Phil Davies | 04 March 2015 at 10.08 GMT
Abolishing £13 Air Passenger Duty on the majority of flights out of Northern Ireland would prove too costly to the Northern Ireland Executive, according to an economic report.
Removing APD would mean a reduction of at least £55 million in Northern Ireland’s block grant from Westminster.
This would cover the loss to the Treasury of revenue it collects from APD on flights locally.
“A strong case for change has not been made,” the report’s authors state.
Northern Ireland has already scrapped APD on long-haul flights – a move which saved a service to New York and has cost more than £2 million.
The report by the Northern Ireland Centre for Economic Policy said the benefits of abolishing APD on all other flights would not cover the figure lost to the block grant.
The loss is “a very significant impact on the economic cost-benefit outcome,” the 67-page report said.
Ireland scrapped its air tax last year which has helped Dublin airport attract new routes.
Scotland is also likely to get power over APD as part of devolution plans.
Northern Ireland is looking into financial help for airlines to operate new routes to destinations such as Canada, Turkey and Germany. Aid would cover 50% of landing charges
Belfast international airport managing director Graham Keddie told the BBC: “We know there are airlines with available aircraft who will move swiftly to grow our network of direct air services, offering highly attractive fares to encourage international visitors to experience Northern Ireland.
“However, the continued application of APD is the most visible deterrent to securing their commitment and, while APD in Northern Ireland persists, they will choose more lucrative
The IPPR report explores the impact of a ‘stronger’ Wales across the border
The potential impact of a stronger Wales on the West Of England has been “neglected” and should be investigated,according to a major reportwhich sets out the powers the Assembly could gain in the near future.
The IPPR think tank’s report states that the devolution of Air Passenger Duty (APD) could have “considerable” consequences for Bristol’s airport.
It also flags up key differences between the Wales-England border and the one dividing Scotland and England.
The report, whose authors include devolution experts Alan Trench and Guy Lodge, states: “Ninety per cent of the Welsh population lives within 50 miles of the English border, and there is a huge amount of connectivity, with 138 million journeys taken between the two countries each year. Whereas Edinburgh and Newcastle are 120 miles apart, and a car journey of two and a half hours, Cardiff and Bristol are just 44 miles apart and under an hour away by road.”
Warning of the impact on Bristol’s airport of devolving APD, it states: “One often-cited fear of increased devolution is the worry that devolving air passenger duty to the Welsh government could damage prospects for international connections from Bristol. Due to the proximity of Cardiff airport, it would be relatively easy for passengers to take their business across the border if it were worth the time and cost of additional connecting travel to do so.”
Arguing that Cardiff could compete for long-haul traffic, the authors write: “Cardiff airport is already in a better position than Bristol in this regard, having a runway that can accommodate Boeing 747s and other large aircraft for maintenance and a number of seasonal long-haul charter flights to the Caribbean. The question of whether Cardiff can attract carriers for scheduled long-haul routes will depend on a number of factors, and no doubt a reduction in APD would make it more attractive…
“Approximately one-fifth of the 6.2 million passengers per annum using Bristol airport have an origin or destination in Wales, further underlining the porous nature of the border between England and Wales. With just 94km between the two airports, there is a significant overlap in catchment areas which makes this highly competitive market particularly sensitive to price differences.”
However, the report notes: “A further issue would arise with the status of Cardiff airport, now that it has been acquired by the Welsh Government. Since Cardiff airport is the only substantial airport in Wales, any use of tax levers which advantaged it would have to satisfy EU rules regarding state aids and ‘state monopolies of a commercial character’ – issues of which the management of Bristol airport are clearly already well aware.”
The authors only expect tax competition from Wales to affect the West of England “to a limited extent”.
Exploring the potential impact of income tax devolution, they write: “Given the extent to which there is a shared labour market between the west of England and south-eastern Wales, devolution of income tax creates scope for a noticeable effect. Depending on the tax decisions made by the National Assembly, there may be an attraction for some workers to live on the Welsh rather than English side of the border, even if they continue to work in England.
“But the amount of such an incentive is small – at most, around £318 per year for workers on the basic rate of income tax, if income tax rates were 1p less in Wales than in England. Moreover, [the] number of workers commuting from Wales even to Bristol is about 10% of the total workforce in the city (and less to the neighbouring local authority areas).
“Such a modest incentive is likely to have a limited impact, even in the medium term – and even if it did, would not affect the resources or labour market in the Bristol area (as workers might move homes but keep a higher-paying job around Bristol). In only a small number of cases would the amount of tax saved or other benefits (such as reduced commuting time) compensate for lower pay levels in Wales.”
Playing down the impact of the devolution of land and property taxes, they state: “[If] price were a significant factor in driving economic competition between the two places, Wales already has considerable advantages when it comes to office space and residential property.”
They note that Wales receives public spending worth £9,740 per head compared to the South West’s £8,171.
Highlighting the lack of financial powers at Bristol’s disposal, they state: “The tools by which Bristol and the west of England are able to determine their own economic future remain highly constrained… Bristol retains little of its own tax base or benefits from growth, and has precious few levers to pull to facilitate economic development free from the restrictive hand of Whitehall.”
Devolving Air Passenger Duty to Scotland is fine if reductions in the tax are mirrored elsewhere, otherwise it’s unfair, says Tim Alderslade of the Airport Operators Association–and voters agree
With the general election less than three months away, the Airports Operators Association (AOA) has today published polling data from marginal seats on the issue of devolving Air Passenger Duty (APD) to Scotland.
This polling, conducted by ComRes, shows there is clear public support for matching any APD reduction north of the border with an immediate similar level of reduction everywhere in the UK.
Politicians seeking to respond to public opinion should take note.
As a sector, UK aviation welcomed the recent Government reforms of APD. Abolishing Bands C and D for the longest flights and axing APD on children under 16 by next year will undoubtedly deliver a much-needed boost to outbound and inbound tourism, and make the UK a more attractive destination for business travel.
Airports and airlines across the country will do everything they can to ensure passengers are aware of these changes, at home and overseas.
However, even with these reforms the UK still levies far and away the highest rates of APD in the world – double those of its nearest challenger, Germany, and the APD take is scheduled to increase in future years.
The Government itself estimates that by 2017-18 total revenues will reach an eye-watering £3.8 billion. To put this into context, in 2006-07 APD raised less than £1 billion for the Treasury.
The AOA and A Fair Tax on Flying, the industry coalition we campaign with on APD, believe a fundamental change in thinking is needed.
The fact that such a change is set to take place in Scotland, care of the Smith Commission’s proposal to devolve responsibility for APD to the Scottish Government, shows just what is possible.
The Commission’s recommendation – accepted by all the main UK political parties – would result in APD rates north of the border coming down by 50%, with the intention to abolish APD altogether eventually.
Draft legislation granting the necessary powers has been published and is due to be taken through the House of Commons by the next UK Government, to become law by next year.
Today’s polling data, reported in Travel Weekly, shows the aviation sector has the UK public on its side when it says all parts of the UK should benefit from the same cut in APD which Scotland is due to get.
The vast majority of voters polled in marginal constituencies – where the general election will be decided – believe APD rates should be consistent across the UK (78%), and more than half strongly agree with this statement.
A similar proportion agreed that if passengers in Scotland were to pay a lower rate of APD, this would be unfair to passengers in the rest of the UK (75%).
Around two thirds of voters of all main parties think the UK Government should commit to match a reduction in APD should the Scottish Government halve current rates (68%), with 40% strongly agreeing.
Airports and airlines need to be able to plan for the future with certainty. The former develop infrastructure for future passenger numbers years in advance. The latter set out their route schedules many months in advance.
The UK Government and politicians of all political hues should take heed of these polling results.
The results mirror growing concerns that allowing one part of the UK to levy substantially reduced rates of APD would not only be unfair to our sector and to passengers, but could also distort the market in terms of where airlines decide to fly to and from.
All those in the aviation and tourism sector should call for the main political parties to set out their thinking ahead of the UK general election, and to publish plans on how they intend to ensure no airport or passenger is disadvantaged by the devolution of APD.
With public opinion clearly supporting the idea that an APD cut in Scotland should be matched immediately by a cut everywhere in the UK and with a general election due now is the time press the case.