Government policies are inhibiting the UK’s competitive position, the World Travel & Tourism Council warns on the eve of today’s Budget.
The UK is “squeezing the economic opportunity” presented by travel and tourism and needs to “significantly change” its approach and policies.
The WTTC wants to see a freeze in the rate of Air Passenger Duty and the UK to align its procedures with the Schengen visa area to simplify access for inbound travellers.
The direct contribution to GDP from travel and tourism will slow this year to 2.5% after having grown by 3.4% in 2013, the organisation warns in its 2014 Economic Impact Report for the UK, published today (Wednesday).
The research shows that the sector directly contributed 3.5% to the UK economy last year and made up 10.5% of the economy when its wider supply chain benefits are included.
Travel and tourism contributed $7 trillion to the global economy – supporting 266 million jobs – and is expected to grow by 4.2% in 2014.
WTTC president and chief executive David Scowsill (pictured) said: “The UK is not taking the potential of travel and tourism seriously enough and is losing out on vital income and potentially hundreds of thousands of jobs at a time when creating employment opportunities for young people is vital.
“A composite of issues are contributing to a quelling of demand: Air Passenger Duty is the highest air tax in the world; the government has ruled out a lower VAT rate for hotels and restaurants; a lack of long-term planning in airport infrastructure; and restrictive visa policies.
“This means the UK is losing out on potential visitors to some of its European competitors, who are implementing more forward-thinking policies.”
He added: “Travel and tourism forecasts over the next ten years also look extremely favourable, with predicted growth rates of over 4% annually that continue to be higher than growth rates in other industries.
“Capitalising on the opportunities for this travel and tourism growth will, of course, require destinations and regional authorities, particularly those in emerging markets, to create favourable business climates for investment in the infrastructure and human resource support necessary to facilitate a successful and sustainable tourism industry.
“At the national level, governments can also do much to implement more open visa regimes and to employ intelligent rather than punitive taxation policies. If the right steps are taken, travel and tourism can be a true force for good.”