Budget airlines are “squeezing the life out of British tourism” and the government is exacerbating the problem by promoting expansion of the aviation industry, MPs were told yesterday.
Budget hotel chain Travelodge accused Ryanair and easyJet of driving an £18bn “tourism deficit” by drawing British holidaymakers away from Britain with low fares underpinned by state tax breaks.
In a hearing at the House of Commons select committee into tourism, Travelodge said inward tourism spending had declined by 16% between 1995 and 2002 while spending by British tourists abroad had climbed by nearly 50%. Greg Dawson, Travelodge director of communications, said no-frills carriers were “the single biggest cause of decline in traditional tourism resorts and we urge the inquiry and government to investigate the airline’s unfair grip on holidaymakers that is squeezing the life out of British tourism”.
Travelodge said airlines received an unfair advantage from the government because they do not pay VAT on international ticket sales. It estimated that a 10% reduction in overseas flights by British holidaymakers over the next 10 years would create 31,250 jobs and generate £1bn for regional tourism. The firm is attempting to break into the British tourism market by opening 20 seaside hotels by 2010.
EasyJet said the Travelodge complaint was “bizarre”. Toby Nicol, easyJet’s communications director, said bed and breakfast owners would probably make similar accusations against Travelodge.