The chief executive of Abta has urged “great caution” before any “radical” changes are made to the consumer protection system.
In his opening speech at the association’s Convention in Marrakech, Mark Tanzer, said: “Mr Rees-Mogg, in his new role as business secretary, has made clear his intent to have a bonfire of EU-derived regulations, and as his department is responsible for the oversight of the Package Travel Regulations, we can assume that they will be in his sights.
“The pandemic shone a harsh light on the whole system of money flows through the travel industry – how consumers are protected and who ultimately is sitting on the risk when things go wrong.
“And 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.”
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He said Abta has made “very strong representations” to the new prime minister Liz Truss and her team, showing how the outbound travel industry accounted for £49 billion of Gross Value Added pre-pandemic – and supported 720,000 jobs in its extended supply chains.
“Most significantly for a government committed to growth, growth, growth, [outbound travel] has potential to grow by 15% over the next five years, given the right regulatory and fiscal environment.
“This would outperform the general expectations for the UK economy and help lead the UK’s recovery in the years ahead.”
He said the ‘turbulence’ in the financial markets is a “real cause of concern” for our members – higher interest rates on top of rising energy bills put a double squeeze on businesses – increased costs just when consumers are starting to tighten their belts.
“Quite where the Chancellor’s tax plans will end up is still to be determined, but one positive step he could take to help get international travel growing is to freeze the level of Air Passenger Duty,” added Tanzer.
“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.
“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.”
Tanzer also expects the structure of the travel industry will continue to evolve, with more businesses electing to become managed branches of a parent travel company, “gaining economies of scale and reducing their own regulatory requirements”.
He also highlighted sustainability issues, adding: “We also need the government to help incentivise the development of low-carbon fuels.
“The government’s Growth agenda demands this, and the alternative of simply taxing emissions will thwart their own ambition.”
He referenced the Abta Holiday Habits report, also released on Tuesday morning, which shows that over the past year overseas travel reached 70% of the level three years ago despite restrictions not being eased until March.
“We’re not out of this thick wood yet, but I think that we should be proud of the speed with which the travel industry has managed to bounce back operationally,” he said.
“I see that the demand for travel has not been dimmed by the pandemic– in fact it may have been intensified.
“One thing that all types of traveller seem to have in common, again as evidenced by our research, is a desire to seek assistance from a travel professional whenever arrangements move beyond the most basic.
“I see us having to battle strong economic headwinds for the next year. But we shouldn’t be daunted.
“The travel industry has not been destroyed by Covid-19, and we can face the new landscape with renewed ambition and confidence.”
Photo credit: Arif Gardner