Commentary on the ABTA Travel Matters
“Travel Matters is now firmly established as a key event in the Travel industry calendar. This year the industry united to stress to the Secretary of State for Transport and the Tourism Minister, that all three tourism sectors, outbound, domestic and inbound, are equally important in the tourism mix, each with a vital role to play in growing the UK economy.” Mark Tanzer, Chief Executive, ABTA
We are delighted to report the key discussion points from the ABTA Travel Matters event last Thursday that Deloitte sponsored and Graham Pickett, Lead Partner, Travel, Hospitality & Leisure, presented at. It was a dynamic forum between the industry and Government, with lively panel debates and many questions from the audience. We hope you find the following summary insightful and engaging.
The third annual ABTA Travel Matters event on 10th May in central London brought together industry and political stakeholders to discuss key matters of concern, including taxation, Air Passenger Duty (APD), airport capacity, the consumer and the UK tourism market.
Mark Tanzer, ABTA’s Chief Executive, set the scene by highlighting the three reasons for campaigning on policy: regulation needing to play catch up to an evolving internet-driven industry; recession putting a huge pressure on industry; and finally tourism’s contribution to economic growth.
Making policy headway
The Secretary of State for Transport, the Rt Hon Justine Greening MP, presented on laying the foundations for a successful, sustainable future. Discussion points included the Civil Aviation bill currently at the House of Commons as it passes through Parliament; Aviation Policy and the finalised framework committed for end of the year or the latest by March 2013; and Border Force issues. Highlighting that the consumer was very much the focus on issues such as ATOL reform and airport experience.
Themes of policy supporting industry and consumers were developed from an industry perspective by Ian Ailles, CEO of Thomas Cook UK & Ireland. In order to promote Britain as efficient and competitive, through infrastructure improvements, scrapping APD, and investing in a highly skilled tourism workforce.
Ailles was joined by panellists Mark Tanzer, Chief Executive, ABTA and Kate Jennings, Head of Aviation Implementation Policy stood in for Greening, and together they discussed ATOL’s future, from the allowable transition period to October when the certificate must be issued, to its possible Government regulation and industry management by industry.
The impact of consumer behaviour on the industry
Graham Pickett, Lead Partner, Travel, Hospitality and Leisure of Deloitte, then presented on the UK travel consumer and how it is driving change in the industry. It was reassuring to see that despite the economic environment and cutting back on other big ticket items, the consumer refuses to compromise on holiday bookings, however the late market dominates as does the increase in staycations while longhaul destinations are waning in popularity.
There is great economic importance to UK of outbound travel, making up 3.8% GDP or £54.2 billion according to a new report commissioned by ABTA. This welcome assessment takes into account the spend at home before outbound travel, and the multiplier effect through the supporting supply chain
A healthy travel industry should have interconnected and interdependent outbound, inbound and domestic sectors, and there is a need to develop UK’s regional product to support inbound and domestic tourists also. John Penrose, Minister of Tourism and Heritage, raised the point that the industry needs to work in partnership with destinations and Government to develop regional UK destinations outside of London. The capital is already a world class tourist destination and the UK regions have untapped potential, so there is a need to segment correctly to create regional products.
Penrose was joined by panel members Mary Rance, CEO, UKinbound; James Berresford, CEO, VisitEngland, Kane Pirie, CEO, Travel Republic and Mark Tanzer, Chief Executive, ABTA to discuss tourism mix. It’s encouraging to know that the UK is 6th largest tourism exporter and in the 5th top tourist destination knocking France off the Top 5 list. However, there’s a lot of Government intervention needed for growth: the cost and language barriers of visa applications; APD discouraging tourists; top rates of tourism taxation; and poor infrastructure development. Penrose ended the session by highlighting the ways that Government was supporting tourism in the next year: including improving the port of entry experience, investing in the skill of the industry by creating a hospitality guild and looking into reform of the visa process to include local language instructions and online applications.
Connecting the UK to the world
Cllr Daniel Moylan, Deputy Chairman, Transport for London, opened the afternoon session on the UK’s need for increased airport capacity to support economic growth. Companies base themselves in London because of the impressive international connections, which in turn promote employment and support the economy. However, Heathrow is in danger of losing its status as a major world hub to neighbouring European airports, and subsequently on business development and growth. According to Moylan a third runway at Heathrow was not possible as there is insufficient room and that a new airport in the east was more than likely, as Boris Johnson had been re-elected and was pro-regeneration of East London.
Moylan was joined by panellists Mike Bowers, Group Counsel, TUI Travel; Louise Ellman MP; Dr Tim Leunig, Chief Economist, CentreForum; and Luke Pollard, Head of Public Affairs, ABTA, to debate this issue. Viewpoints included Heathrow would continue to be London’s main hub due to its west location providing links to many high net worth individuals’ residence in west London and also to the industrial/commercial complex in the M4 corridor. Airport capacity has become a political hot potato: Boris Johnson is against Heathrow’s third runway and Labour is opposed to mixed mode operations at Heathrow.
The session closed with the warning that politicians may segment the market by rich vs poor/leisure vs business but that in reality this is not how the industry works and there is far more cross over than this analysis would suggest.
Rising to the challenge
The event was concluded by John McEwan, Chairman, ABTA, who summarised the challenges to the industry that were highlighted through the course of the day: airport capacity, border control, taxation/APD and financial protection. However, ending on a high note McEwan noted that Tourism is a resilient industry.
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For further information on the event please visit ABTA's website.