Autumn Statement a ‘pivotal point’ for travel industry

ABTA and UKinbound have urged the Chancellor to recognise the unique position travel businesses are in, ahead of next week’s Autumn Statement.

The trade bodies say that despite a decent summer the travel industry is trailing other sectors when it comes to its recovery and has entered the cost of living crisis at a very different starting point to the rest of the UK economy.

The return to business was significantly later than the rest of the UK economy – including the retail and hospitality sectors.

Despite travel restrictions remaining, Government support was tapered from July 2021 and removed altogether by the end of September that year.

The Associations say it is important the Government strikes the right balance to make sure that travel businesses can continue to recover and thrive, particularly given the travel industry’s annual contributions to the Exchequer.

New research³ from ABTA and UKinbound finds that £13.2bn is already paid to the Treasury in taxes every year from international travel, and that with the right policy framework inbound and outbound travel could outperform the average growth for the UK economy.

The study shows inbound travel is forecast to grow 20% and outbound travel 15% by 2027, compared to 2019 levels, versus forecast growth of 10.3% in the wider UK economy.

However, the trade bodies argue that if the government chooses to remove support from travel businesses too soon, or adopts policies such as further increases in UK aviation taxes, that will reduce customer demand.

ABTA and UKinbound’s five-point plan for supporting the travel industry’s recovery includes:

• Freeze Air Passenger Duty for the remainder of the current parliamentary term;
• Extend energy and business rate support for travel businesses beyond March 2023;
• Work with the British Business Bank to encourage lenders to adopt a sympathetic view to travel businesses requiring more time to repay debts;
• Reinstate the VAT reclaim scheme to make the UK a global shopping destination;
• Create a fully digitalised youth group visa application process to reverse the decline in youth group travel that has resulted from the end of EU ID card acceptance within the UK.

Mark Tanzer, Chief Executive of ABTA – The Travel Association said: “The Autumn Statement will be a pivotal moment for the UK’s international travel industry and will shape its future ability to grow over the next few years.”

“We need the Chancellor to strike the right balance with the upcoming Statement. Getting the right tax and policy framework would see travel businesses continue to build on a decent summer.”

Joss Croft, CEO, UKinbound added: “Speaking with a united voice makes the UK’s international tourism industry infinitely stronger.”

“Inbound, outbound and domestic tourism businesses across the country continue to walk on a tightrope as they navigate recovery with rising costs and Covid-19 loan repayments, while striving to maintain high customer standards and service.”