The current ‘turbulence’ in the financial markets is a real cause of concern for ABTA members, the association’s Chief Executive Mark Tanzer told delegates at this week’s Convention in Marrakech.
He said higher interest rates on top of rising energy bills are putting a double squeeze on businesses, increasing costs at a time when consumers are tightening their belts.
“Many travel businesses have come out of the pandemic with less financial headroom than they went into it, so increased borrowing at higher costs is not an option,” said Tanzer.
He said ABTA has already made “very strong representations” to the new Prime Minister and her team, emphasising the pains of the travel industry and its economic potential.
The industry has the potential to grow by 15% over the next five years, given the right regulatory and fiscal environment, he added.
New ABTA research commissioned from York Aviation shows the outbound travel industry accounted for £49bn of Gross Value Added pre-pandemic.
Tanzer said the pandemic “shone a harsh light” on the system of money flows through the travel industry, customer protection “and who ultimately is sitting on the risk when things go wrong”.
“It’s right that we should look at the system of financial protection to remove inefficiencies and duplication but we should proceed with great caution before radically changing a protection system which has served the industry – and its customers – very well through many crises, natural and man-made.”
He called on the Chancellor to freeze the level of Air Passenger Duty to get international travel going.
“Over recent years, APD has increased with inflation, and, given the current economic backdrop, doing so again would add significantly to the costs for customers who are already feeling squeezed,” he said.
“The Prime Minister spoke in her conference set-piece about positioning Britain as open to the world, and about the importance of our being globally competitive. At this time, sanctioning substantial increases in APD – already amongst the highest departure taxes anywhere in the world – would send the opposite signal – that Britain is closing for business.”