Welcoming the announcement of the new coalition Government, UKinbound has urged the new Government to address the real contribution that tourism can make to economic recovery. The UK Tourism industry in 2009 accounted for 8.9% of the country’s GDP and employs over 2.6 million people both directly and indirectly1. The UK currently has a very favourable exchange rate for overseas visitors and with the Olympic and Paralympic games coming in 2012 now is the time to capitalise on this increased interest that exists for our Tourism industry and boost our economy.
Mary Rance, Chief Executive UKinbound said
“Recognising the pressure on government to tackle the UK budget deficit as its first priority, tourism is in a unique position to be able to boost our economy. Now is the time to acknowledge that inbound tourism is the UK’s third largest export industry generating over £19bn in export earnings for the UK economy. Long term growth is achievable but will depend on maintaining investment in promotion of the UK as a destination and removing the regulatory barriers to growth.”
Excessive entry charges, unique to the UK, such as Air Passenger Duty (APD), have already seen a decline of visitor numbers of just less than10% in 2009 compared with 2007 when APD was first doubled. Visitor numbers have declined year on year since 2007 following 6 years of continuous growth and can expect to continue seeing a decline as consumers opt for mainland Europe to avoid these charges and increased visa charges as well.
For each family that is deterred from visiting the UK, the economy forgoes £4,000 in revenue. The decrease in visitors as a result of the higher rate of APD, together with increased visa charges, has actually taken over £1.2 billion in 2009 out of our economy for a return of only about £600 million from APD. These figures are based on averages and may be considerably worse considering the biggest decline in numbers we are seeing are from the long haul, most penalised APD destinations, and these account for some of the highest spending visitors.
The current policy is reducing the country’s overall tax return at the same time as reducing our GDP and so does not appear to make viable economic sense or give a very warm welcome to the world. We look forward to this Government actioning its pledges to review and amend APD to a, per plane rather than per passenger tax and hope that their solution can remove this barrier to UK entry.