BTC: Grim outlook for UK travel & tourism industry

This decision this week to raise the Air Passenger Duty (APD) nearly 10 percent, and the admission that it is primarily for general revenue purposes, represents reckless governance in the extreme and is only made worse by the wholesale rejection of the travel industry’s well-considered concerns. The immediate consequence will be lost jobs; the longer-term fate of a substantially weakened UK travel and tourism industry as well as its global competitiveness is sealed.

Earlier this year, Business Travel Coalition organized some 70 corporate travel departments, travel management companies and tour operators from around the world and transmitted a letter to Rt Hon. George Osborne MP, Chancellor of the Exchequer and Rt Hon Michael Moore MP, Secretary of State for Scotland, urging a reduction in the APD. The duty had already become a burden on the competitiveness of the UK for meetings, incentive trips, conventions and tourism.

Signatories to this letter included Makino, Inc., from Japan, Dnata Travel Services from Dubai, Argo Travel from Greece, Qiagen Group, from The Netherlands, Alfa Laval from Sweden, Travel Leaders from the U.S., Li & Fung Group from Hong Kong and UNIGLOBE Normark Travel Inc. from Canada.

National economies have become more interlinked and these signatories are all negatively impacted by the onerous APD whether by reduced tourism to their countries or by the UK increasingly pricing itself out of the markets for meetings, incentive trips and conventions. They are indeed stakeholders in UK tax policy.

When the EU Emissions Trading System kicks in during 2012 – effectively taxing the UK twice for its role in “protecting the environment,” – the cumulative, negative impact on the UK and its external stakeholders will be orders of magnitude more grim.