Today, UK Chancellor George Osborne gave his Autumn Statement – revealing to the nation that the state of the British economy is worse than expected with financial growth sitting at -0.1 per cent – a nine per cent deficit in the figure predicted in the Budget.
But how will this affect the travel industry?
According to industry insiders, the sector has already experienced slowed business and leisure travel planning as a direct result of uncertainty over future tax rises.
Proactive firms have been cutting back on business travel in fear of said higher taxes and ahead of potential spending cuts in the New Year.
The Global Business Travel Association has predicted that companies will spend around £12 billion less on business travel in 2014 if the mooted tax hikes and spending cuts go ahead.
And even Expedia, the world’s largest travel agency, has reported that regular client bookings, which normally grow in tandem with the overall economy, have been down lately.
ABTA also reckons that a further increase in Air Passenger Duty will be revealed following today’s statement – which would signal another major blow for the travel industry.
In a recent survey, it revealed that two thirds of those interviewed think Air Passenger Duty is already too high and that half of the UK public believe the tax puts the economy at a disadvantage.
In an interview with Travelmole, Chief Executive Mark Tanzer, who met with Treasury Minister Sajid Javid earlier this week, said: “Despite the clear calls from the public and businesses, the Government is still refusing to commission an independent review into Air Passenger Duty. It’s evident that the Treasury is still to be convinced of the merits of this approach.”
But all is not lost in this respect, according to Tanzer, who believes that company and consumer pressure is the answer.
He added: “With another rise in Air Passenger Duty expected to be announced, it’s vital that businesses and consumers continue to maintain pressure on the Government to freeze Air Passenger Duty until it has conducted a proper independent analysis on the impacts of this on the economy.”
We’d love to know your thoughts here at MyTravelMoney.co.uk. Do you agree with Air Passenger Duty, for example? And what else can the travel industry do to ensure its survival during the European financial crisis?
Share your opinions with us over at Twitter.
