Addressing an industry audience at the Hotel Investment Conference Europe in London, World Travel & Tourism Council president David Scowsill has called on the UK Government to abolish Air Passenger Duty.
The UK Government is choking the growth of travel in the form of Air Passenger Duty, argued Scowsill.
APD is cited numerously as the reason for the withdrawal of marginal air routes, he added, and the losses or failure of travel companies.
More importantly, it is dampening demand for travel out of the UK, as many British consumers just cannot afford the extra amount levied on the price of each ticket.
This taxation costs the industry £2.5 billion each year and threatens the UK’s international competitiveness status as a tourism destination.
“APD has always been a blunt instrument and a bad tax,” explained Scowsill.
“The current distance-based system unfairly penalises long-haul destinations and is uneven in its application.
“For example the Caribbean is closer to the UK than the US West Coast yet is in a higher band.”
APD distorts the market and damages the economic prosperity of certain long haul destinations, often those whose economies are extremely dependent upon travel and tourism.
UK Government claims that the system is designed to offset aviation’s environmental impact and reduce emissions, but there is no evidence that money raised is used to offset any such impact.
UK treasury is currently evaluating tinkering with current APD scheme to spread the pain, without reducing its overall income stream.
With the adoption of the EU Emissions Trading Scheme from next year, it is time for the UK Government to recognise that APD is a tax whose time has come - and gone. It must be phased out now.
Travel and tourism is worth £105 billion to UK plc, seven per cent of GDP, and employs some 2.4 million people.
Its contribution to GDP will increase by 3.7 per cent a year and bring with it 512,000 new jobs to the UK over the next decade.
However, compared to the rest of the world the country’s growth ranks a lowly 127th out of 181 countries.