The tourism industry in the Pacific region is raising grave concerns over the negative impact of the UK government’s proposed further increase in Air Passenger Duty (APD), scheduled for November 2010. Members of the Pacific Tourism Leaders’ Forum, meeting in Sydney, are calling the tax ‘ill conceived and draconian’.
Tourism is among the top three income generators for most countries in the Pacific region and is the top sector for employment in almost all of them. Long haul tourism contributes significant numbers and the industry fears that this segment is at considerable risk because of the planned further increases in APD.
Participants at the meeting, organised by the Pacific Asia Travel Association, fear that such taxes act as a barrier to trade and development within the region, given its high dependence on the tourist dollar.
The planned increase in Air Passenger Duty in November adds significant additional costs to business and leisure travellers visiting the Asia Pacific region. A family of four travelling from the United Kingdom to any destination in Band D (distance of 6,000 statute miles or more) face a travel bill of ?340 sterling. In January 2007 that same family paid just ?80 sterling.
“The UKAPD has raised alarm bells across the region’s tourism sector and catalysed the formation of the Forum. This tax is politically motivated and is clearly the result of poor policy making,” said Matt Hingerty, Managing Director of the Australian Tourism Export Council and a member of the PTLF. “It is difficult to understand that a global economic power such as the United Kingdom could act with such insensitivity. This draconian tax serves only to generate revenue with absolutely no benefit to the environment that it purports to protect.”
The PTLF comprises major stakeholders from the region’s travel and tourism industry embracing public and private sectors and is a broad representation of the communities served across the region.
“The impact will be even more severe if other European nations choose to adopt this type of tax on travel. Indeed, the effects of such a regressive tax would be catastrophic for the smaller economies in the region,” Mr Hingerty added. “The Forum finds some comfort in the fact the Britain’s major opposition party (Conservatives) has pledged, in its election manifesto, to review and reform the Air Passenger Duty. The next Chancellor of the Exchequer must act swiftly and decisively. Jobs are at stake across our region.”
PATA Regional Director - Pacific Chris Flynn says, “One of the attractions of the Pacific region is its pristine beauty, known and appreciated by generations of travellers. The long haul tourism industry has helped to preserve natural environments because of the income generated for regional governments.
“Threats to tourism revenue will lead to pressure on natural resources as locals look to other sources of income – and that’s bound to include the leveraging of these resources. The disruption of air travel caused by the volcanic eruption in Iceland illustrates the sensitivities of the region. New Zealand, for example, lost several million dollars a day in tourist revenue when flights from Europe were grounded.”
ATEC’s Matt Hingerty concludes, “All Forum members agree that this travel tax will only hinder the recovery of the region’s economies from the global recession. In the longer term, it will continue to threaten these economies and the livelihoods of millions of people employed directly or indirectly in travel and tourism.”
* PATA has been campaigning against the UKAPD since November 2008. Recent actions include the lobbying of British Ambassadors and High Commissioners by PATA Chapters.