Foreign tourists are being put off from attending the London 2012 Olympics due to “exorbitant levels” of Air Passenger Duty, culture secretary Jeremy Hunt has been warned.
Chief executives from across the travel sector have written to Hunt to say that flight reservations to the UK from Australia and New Zealand are down 25% and 26% respectively, compared to bookings for the same period in 2011.
They say this is part of a “growing body of evidence suggesting that Britain’s exorbitant levels of Air Passenger Duty are putting tourists off coming to the UK during the Olympics”, and they say it is “inconceivable” that the recent 8% increase in APD won’t deter visitors from coming to the UK during the Olympics.
The chief executives say that travellers are wising up to APD and some are finding ways to avoid paying the duty, pointing out that “European cities with hub airports, such as Paris, Brussels and Amsterdam are also enjoying a significant uplift in bookings around the same period. If these passengers depart by the same routes, many will avoid paying higher rates of APD or paying APD altogether on their outbound journeys.”
The letter says: “It is contradictory in the extreme to launch an advertising campaign to encourage inbound tourism ahead of the Olympics just weeks before introducing a double-inflation rise in APD, levied on the very same people we’re trying to attract.
“We call on the government in the strongest possible terms to commission robust economic modelling research to prove beyond any possible doubt the damaging impact that APD is having across the whole economy.”
The letter was sent to Hunt yesterday 100 days before the start of the Games. Signatories to the letter include Anne Godfrey, chief executive of the Guild of Travel Management Companies, Mary Rance, chief executive of UKinbound and Simon Buck, chief executive of the British Air Transport Association.
Godfrey said: “The tax avoidance measures that passengers are taking to get around paying APD are hardly surprising.
“It’s likely that more and more passengers will explore ways of circumventing the tax, particularly following the increase in APD by a further 8% last month, at the same time as many European countries are cutting their air passenger taxes or abolishing them altogether.”
Rance said: “The overall picture for inbound bookings throughout the whole of this year is disappointing.
“Forward bookings for travel to the UK through inbound operators between April to June – when the Queen’s Diamond Jubilee falls – are down are by as much as 25% compared to 2011.
“While bookings for the third quarter of the year – during the time of the Olympics – are down by up to 50%. It is clear that APD is a major contributing factor deterring the regular visitors from coming to the UK, both before, and during the time of the Olympics.”
Mike Carrivick, Board of Airline Representatives’ chief executive in the UK – whose decision to retire was covered by Travel Weekly today – said: “Everybody is seeking a positive legacy from the Olympic and Paralympic Games, especially an increase in tourism to the UK. That legacy will be hindered by the government’s own taxation policies unless it realizes the huge damage being done by APD.”
Kevin Thom, president of the Scottish Passenger Agents’ Association, added: “This is just another example of why there is a widespread belief that APD is damaging the economy and reputation of the UK as a place to visit or to do business in.”
Simon Buck said: “By continuing to ratchet up the tax on flying from UK airports, the Government will only drive even more passengers to cheat the taxman and fly to their destination on separate tickets via continental hub airports such as Amsterdam, instead of directly from the UK. That isn’t good for UK business, the travelling public, jobs, the economy or even in the long run, the Treasury.”