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


Opinion: The country is united – all for one on APD

Opinion: The country is united – all for one on APDDevolving 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.

Sourced from Travel Weekly

Cut in APD confined to Scotland ‘unfair’ say voters

Cut in APD confined to Scotland ‘unfair’ say votersImage via Shutterstock

A poll published this morning suggests a majority of voters see plans to cut rates of Air Passenger Duty (APD) in Scotland without matching cuts throughout the UK as unfair.

A ComRes poll on behalf of the Airport Operators Association (AOA) in the UK’s 40 most-marginal constituencies found three out of four voters (75%) agree a lower rate of APD in Scotland would be unfair to passengers in the rest of the UK.

Two thirds (68%) thought that if the Scottish Government reduces APD by 50%, as promised, the UK Government should match this immediately across the country.

A majority (78%) agreed APD rates should be consistent across the UK, with more than half (54%) agreeing strongly.

The Scottish Government made a commitment to cut APD on flights from Scottish airports by half, as a prelude to abolition, after the Smith Commission on devolution recommended APD raised at Scottish airports be devolved to the Scottish Government in November.

The main political parties have accepted this, and the travel industry coalition A Fair Tax on Flying – of which the AOA is a member – has called on the Government to commit to matching any reduction in APD in Scotland across the whole of the UK.

An AOA spokesman said: “We cannot have a situation where the Scottish Government is able to undercut the rest of the UK with respect to air taxation.

“The Chancellor is on record saying that he will not allow airports in the rest of the UK to be disadvantaged by Scotland being able to levy a substantially reduced level of APD.

“As HM Revenue and Customs has already concluded, this would distort competition and result in passengers and airlines relocating to airports north of the border.”

He said: “We call upon all political parties to work together to ensure that devolution to Scotland does not unfairly penalise communities and passengers in the rest of the UK.”

Pollster ComRes surveyed 1,000 UK adults in early February.

Sourced from Travel Weekly

Record inbound tourism figures welcomed by industry leaders

Record inbound tourism figures welcomed by industry leadersTrade body UKinbound welcomed record UK tourism figures confirmed yesterday but reiterated calls for action on “crippling” Air Passenger Duty and high visa costs.

Official figures showed that foreign traveller numbers to the UK rose by 6% to 34.8 million last year over 2013 with spending up by 3% to £21.7 billion.

Arrivals from the US, the most valuable source market, were up by 4% to 3.7 million – the best level since before the recession in 2008.

The figures indicate that numbers are on par with prime minister David Cameron’s forecast of welcoming 40 million visitors per year by 2020, but that they are likely to supersede this projection by 2017 if the 6% annual growth rate can be maintained.

But UKinbound said: “Without limitations such as the crippling APD and high visa costs, it is even likely that by 2020, visitor numbers could almost double, cementing Britain as a market leader.”

UKinbound CEO Deirdre Wells said: “The UK inbound tourism industry has made momentous progress this year, which has exceeded all our expectations.

“What is needed at this stage is continued support to maintain momentum – by increasing the competitiveness of the UK’s taxation and visa system, we could see these record breaking figures double by the end of the decade.”

VisitBritain chief executive Sally Balcombe said: “Inbound tourism is increasing year-after-year, with Britain now achieving its second consecutive annual record, with further growth forecast for 2015.

“The marketplace for global tourism is getting tougher, but the government’s GREAT campaign and VisitBritain’s successful global marketing activity has meant that tourism is increasingly becoming an essential part of the wider success of our economy.

“Such positive growth from North America is very encouraging and we will look to boost this further with our 2015 Countryside is GREAT campaign, sending all these valuable visitors across the nations and regions of Britain.”

Tourism minister for Tourism Helen Grant added: “I am delighted that tourists from overseas are coming to our country in record numbers, spending more and enjoying the very best of Britain.

“It confirms that our tourism strategy is working and highlights the important role the industry plays in the government’s long-term economic plan.

“I will continue to work hard with the sector to encourage tourists to visit all parts of the country to further boost local growth and jobs.”

Sourced from Travel Weekly

Senior minister tells industry ‘APD raises money’

Senior minister tells industry 'APD raises money'A senior member of the government defended Air Passenger Duty yesterday after coming under sustained attack at a major travel industry conference.

Education secretary Nicky Morgan told the UKinbound convention in Leicester: “APD raises money. As education secretary I like having money to spend on schools.”

Ryanair sales and marketing manager Maria Macken told Morgan: “If you get rid of the tax, the extra yield will offset the loss of [Treasury] revenue.”

UKinbound chairman Mark McVay said: “The UK is at a competitive disadvantage. Isn’t it about time we abolished this tax?”

But Morgan, who worked at the Treasury before heading the education department, said: “There are people who model this all the time and we have yet to see a compelling overall case [for abolishing APD].”

She added: “We have managed to keep the cost of APD on short haul flights down since 2010.

“We have made some changes, scrapping APD for children under 16, and I oversaw a move to two APD bands.” She said: “There do have to be costs.”

Labour MP Gerry Sutcliffe, a member of parliament’s select committee on culture and tourism, told the inbound industry association convention: “We should get rid of APD.

“It has to be addressed by the incoming chancellor as it puts us at a competitive disadvantage.

“The trouble is it is good revenue for the Treasury.”

Google head of travel and Conservative parliamentary candidate Nigel Huddleston told Morgan: “A family of four from China can spend £650 on APD before they even enter the country.”

Morgan told him: “I look forward to seeing you lobby the Chancellor in Parliament.”

Sourced from Travel Weekly

Downturn in US bookings to Britain defies inbound boom

Downturn in US bookings to Britain defies inbound boomImage via Shutterstock

The UK may have attracted record visitor numbers in 2014 but bookings among the highest-spending visitors this year are down.

Travel booking data-analyst ForwardKeys reports long-haul bookings to the UK in January down 2.9% on the same month last year.

ForwardKeys crunches airline booking data from all the major global distribution systems (GDSs) including those dominating such markets as China and Japan.

The company reports “a slight upturn” of 0.9% in forward bookings for arrivals to the UK in February and March, but points out this is for travel that has not yet taken place.

January saw falls in several markets, most notably the US – the UK’s most-important source market – where booking numbers were down 3.1% year on year.

Bookings from Hong Kong and China were substantially down, most likely due to the timing of the Chinese New Year, but February and March show significant improvement year on year from both countries – with bookings from China up 64% and Hong Kong up 32%.

However, ForwardKeys notes: “The all-important US market, which is bigger than Australia, Canada, China, Japan and India put together, still shows a 3.1% lag [for February and March].”

It reports that France, Germany, Italy, the Netherlands, Spain and even Switzerland “all show signs of robust growth throughout the first quarter”.

ForwardKeys chief executive Olivier Jager said: “A major problem for the UK is a substantial loss in market share of visitors from the USA, its most important market.

“Last year, growth from the USA was 3.6% up but the outbound US market to Western Europe grew 5.4% and the loss of share shows no sign of stopping.”

Sourced from Travel Weekly

Flybe undecided on airport expansion options

Flybe undecided on airport expansion optionsThe importance of regional air links and the damaging impact of Air Passenger Duty have both been highlighted as key issues for consideration by the Airports Commission.

Flybe, in its submission to the commission which is considering three options for airport expansion in the southeast, says the decision about a new runway should be based primarily on strategic and economic ‘national’ considerations.

The regional carrier, which sold its Gatwick slots to easyJet and is facing increased competition on new routes from London City airport, says that there “does not appear to be any clear and verified ‘show-stoppers’ that would automatically rule out any of the short-listed schemes”.

The shortlisted options are a third runway at Heathrow, a runway extension at the west London hub and a second runway at Gatwick.

The airline says it unable to express a clear preference publicly as much depends on the commercial terms offered “and we have not yet had sufficient clarity on these”.

However, Flybe confirms that it would be interested in re-building operations from Gatwick if a new runway is given the green light, subject to a sufficient number of affordable slots being made available for regional airlines at attractive times of the day.

Flybe’s evidence – seen by Travel Weekly – describes the weakest areas of the commission’s work to-date as including:

  • Clarity regarding regional access to new slots coming out of new runway infrastructure.
  • Extraction of binding commitments over such slots.
  • Its decision to “shy away” from any engagement over the “crucial issue” of the form and structure of APD.

Flybe points out work it has carried out demonstrates how changes to the scale of APD and the way in which it is raised “could materially improve the value of a new runway to the UK’s regions, and our millions of regional customers”.

The airline adds: “Our overriding view remains that in the absence of a thorough analysis on APD the commission is not fully factoring in the potential benefits from guaranteed and affordable regional connectivity at a new or enhanced national hub.”

Flybe also suggests the use of RAF Northolt, to the north of Heathrow, as a potential location for regional air services.

The military airfield, which is also used by private business aircraft, could “single-handedly deliver some beneficial outcomes” while new runway capacity is being built.

“We refer to the temporary or permanent use of RAF Northolt for regional air services,” Flybe says, suggesting this option has been overlooked by the commission.

“We believe this facility, which is owned and operated by the government, offers significant potential and we would be very keen to explore with the commission and/or government what might be done to realise that potential quickly and cost effectively.

“We know there is enormous appetite for such a solution amongst many of the regions we serve.”

Sourced from Travel Weekly