Budget 'not as awful as expected', Aito delegates told

The Budget is “not as awful as rumours led us to expect” and should lead to the reopening of “spending taps” on holidays, according to Travel Trade Consultancy director Martin Alcock.

 

Speaking at this year’s Aito Overseas Conference in Asturias, Spain, Alcock was optimistic about the market following the announcement of the details in the Autumn Budget, particularly for companies in the specialist travel market.

 

“The fear of the unknown causes people to pause. I am confident that now [the Budget] is out in the open, the spending taps will reopen,” he said, alluding to mounting fears about what tax cuts were planned by the government prior to the Budget.

 

He noted: “I think that when it [the Budget] came, it was not really as bad as we expected.”

 

But he stressed it was “too early to tell” what the true impact would be of the budget on customers and businesses longer term.

 

He added: “We have not had a meltdown of the bond markets so far. Markets have judged these budgets well. Overall, I think it probably has not been as bad job of balancing a terrible series of choices and I think we should console ourselves that we are not in the gambling sector because that got hammered.”

 

He highlighted key elements, such as maintaining income tax thresholds and changes to pensions and dividends, as factors which would hit employees while national minimum and living wage rises and reduction in capital gains tax relief for businesses run as Employee Ownership Trust would hit employers. Aito tour operator McKinlay Kidd became an employee-owned firm last year.

 

Describing the reduction in tax benefit for the employee ownership trust model from 100% to 50% as "disappointing", he added: "Some travel companies are in the early stages of doing that and have suddenly lost 50% of the benefits, which is unfortunate."

 

Aito companies also gave positive feedback overall when asked their current business outlook.

 

In a snap poll of delegates at the start of the conference, 12% described their confidence levels as “very high”, just over a fifth said business was “just ticking along” and around 18% saying they were “nervous” about the global economic and political landscape.

 

Expressions Holidays director Martin Garland said business had increased since the Budget had been announced, in a sign customers had been waiting to hear the news before deciding to book a holiday.

 

He said: "Post budget day we had a cracking day converting bookings where people had been holding off to see what was going to happen and how the stock markets reacted. There were no draconian measures so that gave them the confidence to book. It has not had a big impact on the target audience of most Aito members."

 

Sam Clark, managing director, Experience Travel Group, was also upbeat. "I am pretty positive it [the Budget] will not have a negative impact on people’s booking behaviour," he said, adding the operator had enjoyed strong bookings even in the two weeks prior to the Budget.