UK operators, hoteliers and restaurateurs fear a significant slump in tourists next year should Air Passenger Duty be raised for the fourth time in five years.
An average fall in bookings of about 5% is predicted by businesses in a survey, while nearly a third said that bookings for next year were already down. Such a drop in visitors – despite London hosting the Olympics and the Queen’s Jubilee – would result in an estimated £784 million in lost revenue and could threaten thousands of jobs.
A Tourism Alliance spokesman said: “Simply hosting the Olympics and the Queen’s Jubilee does not guarantee that foreign visitors to Britain will increase. The painful truth is that without major changes to underlying Government policy – such as addressing the exorbitant levels of APD – Britain’s tourism sector will struggle to compete.”
UKinbound chief executive Mary Rance told the Daily Telegraph: “2012 has the potential to be a crippling year for inbound tourism to the UK if the Government goes ahead with its double inflationary rise in APD.
“These findings demonstrate that Britain’s tourism sector could lose hundreds of millions of pounds next year because of tourists avoiding exorbitant aviation tax rates.”
As well as making it more costly for Britons to head overseas, APD also discourages overseas holidaymakers – who pay the tax on their journey home – from visiting Britain. The government is expected to make an announcement on APD as part of the Chancellor’s Autumn Statement due on November 29.
The Treasury has already dashed hopes of a swift reduction in APD to offset the costs of airlines joining the EU Emissions Trading Scheme in January.